The legal battle between the SEC and Coinbase reaches another turning point. An American judge has just cast doubt on the foundations of crypto regulation in the United States.
Crypto status: US judge seeks clarification
After the Ripple affair, it is the turn of the legal battle between SEC and Coinbase to attract the attention of the crypto community. Recently, it took a significant turn during a recent hearing.
Indeed, American judge Katherine Polk Failla is today calling into question the very foundations of crypto regulation in the United States. At the heart of the debates is the SEC’s alleged reinterpretation of the famous Howey test. This is a key standard used to determine the qualification of assets as securities.
Judge Failla specifically asked the SEC to provide clearer definitions of crucial terms such as “securities” and “staking.” Enough to highlight the persistent ambiguity around the classification of crypto currencies.
If Judge Failla’s position prevails, it could potentially mean that cryptocurrencies (including XRP) would no longer be considered securities in the United States. This development would be a major step forward in the recognition of crypto as a distinct asset class.
Decryption: crypto will escape the strict regulations applicable to traditional securities.
SEC responds with warning to Coinbase
In the heat of the crypto battle, the SEC warns Coinbase not to tamper with the Howey test. According to the American crypto regulator, any modification would go against the regulations established in 1934.
For its part, Coinbase rejects the allegations against it. The crypto exchange firmly maintains that it is not reinterpreting the Howey test in any way. According to its legal team, the SEC is instead expanding the application of the test to adapt it to the growing complexity of the crypto market.
“Coinbase’s position does not imply a revision of the Howey test, but rather a necessary adaptation to take into account the rapidly evolving technology and practices of the crypto market,” we explain.
This confrontation between the SEC and Coinbase could therefore redefine the status of cryptocurrencies. The final decision will inevitably influence the crypto landscape in the United States.
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