Coinbase has filed a motion to dismiss the Securities and Exchange Commission's complaint in the continuing legal dispute between Coinbase and the SEC.
Coinbase accused SEC of going beyond its legal authority, expressed its concerns in a legal case filed on June 29 with the U.S. District Court for the Southern District of New York.
This action demonstrates the U.S.-based crypto exchange's resolve to fight the SEC's complaint. Even if all of the claims made in the case are true, it is claimed in the petition to dismiss that the plaintiff lacks a legitimate legal claim. The legal counsel for Coinbase wrote in the document:
" if the SEC is right that the assets and services it names fall inside the purview of its current regulatory jurisdiction, this [legal] action must be dismissed on separate grounds because it infringes upon Coinbase's right to due process and amounts to an unusual misuse of the legal system."
The SEC lawsuit alleged that Coinbase facilitated unregistered trading in 12 digital tokens that were deemed securities. The firm disputes this allegation, arguing that the SEC applies securities laws to certain digital tokens in ways that differ significantly from the existing legal framework. Coinbase Chief Legal Officer Paul Grewal tweeted on June 29 that the SEC's allegations "go far beyond current law" and should be dismissed.
The SEC's definition of security includes an investment contract, which the Supreme Court interpreted in Howey's test to include transactions in which individuals invest money in a common enterprise and expect profits primarily from the efforts of others. SEC designates 12 Crypto assets as Securities in Lawsuit.
The exchange's attorneys further allege that in 2021, the SEC reviewed Coinbase's registration filings with the commission, allowing the company to sell shares to investors when it went public.
After approval, an extensive review process took place over several months, including in-depth discussions with Coinbase. Coinbase now has over 240 tokens available for trading on its spot exchange, including 6 of the 12 currently in dispute.
