Coinbase has taken a strong stance against the United States Securities and Exchange Commission (SEC) by utilizing case law to support its arguments. In a recent move, Coinbase filed a memorandum on May 24 in support of its interlocutory appeal, which challenges a specific ruling in an ongoing case. This filing is in response to the SEC’s opposition to Coinbase’s initial request for the appeal. The interlocutory appeal was initially filed by Coinbase on April 12, disputing a ruling on March 27 that claimed the SEC had sufficient grounds to assert that Coinbase’s staking program was an unregistered securities offering.
Coinbase’s main argument revolves around the controlling question in the SEC suit, which questions whether an investment contract necessitates a contractual undertaking. In its memorandum responding to the SEC’s opposition, Coinbase highlighted that no court has ever required a post-sale contractual undertaking for the application of the Howey test. Therefore, Coinbase believes that this issue is ripe for a court decision and not simply the application of established law.
Coinbase further pointed out the inconsistencies between the SEC’s claims in its suit against Ripple and those in the Coinbase case. Additionally, Coinbase highlighted the recent passing of a bill by the House of Representatives that aims to limit the SEC’s jurisdiction, which further weakens the SEC’s claims.
The SEC initially filed a lawsuit against Coinbase in June 2023, accusing the cryptocurrency exchange of violating securities laws. Alongside the allegations regarding the staking program, the SEC also claimed that 13 of the cryptocurrencies listed on Coinbase were securities.
Coinbase has been actively defending itself and the crypto industry as a whole. In response to the SEC suit, Coinbase launched the Stand With Crypto campaign, which has now expanded to include a political action committee.
In related news, it has been reported that 1 in 6 new Base meme coins are scams, with a staggering 91% of them having vulnerabilities.