Coinbase Knew Is Violated Securities Law, The SEC Says

Lawyers representing the U.S. Securities and Exchange Commission expressed disbelief in their latest filing regarding an enforcement action against Coinbase, a prominent American cryptocurrency company.

Coinbase’s argument that it was unaware of its violation of securities laws was met with skepticism by the agency. Additionally, the SEC refuted Coinbase’s assertion that the approval of a 2021 registration statement for its initial public offering negated the merit of the enforcement case against it.

“Coinbase, a multi-billion-dollar entity advised by sophisticated legal counsel, argues it was unaware that its conduct risked violating the federal securities laws, and suggests that by approving Coinbase’s registration statement in 2021 the SEC confirmed the legality of Coinbase’s underlying business activities—at that time and for all time,” SEC lawyers wrote Judge Katherine Polk Failla of the Southern District Court of New York.

“In other words, Coinbase adopted the very legal framework as a basis for making listing decisions that it now claims has no applicability to its activities,” they continued.

The SEC filed an enforcement suit against Coinbase, claiming that the company used the Howey test as a basis for deciding which assets to list on its website.

Coinbase attempted to have the case dismissed, and the judge, Polk Failla, will review the arguments and make a decision soon.

Coinbase Chief Legal Officer Paul Grewal called the SEC’s allegations “more of the same” in a series of tweets.

According to Coinbase CEO Brian Armstrong, American lawmakers are missing out on valuable opportunities in the cryptocurrency industry due to their apprehension following FTX’s collapse last year.

Armstrong believes that the U.S. has experienced a decline in economic freedom rankings, as indicated by the annual report released by the conservative think tank based in Washington D.C., the Heritage Foundation.

The CEO argues that crypto is the best-suited technology to increase economic freedom across the world.

“The US is squandering an early lead, in part because SBF (Sam Bankman-Fried) embarrassed some politicians and regulators who now want to look tough on crypto.”