Crypto
Coinbase, facing SEC lawsuit, says regulator lacks police power over crypto
/cloudfront-us-east-2.images.arcpublishing.com/reuters/MCGLG77BT5K4VOT5Y7YJLQ5BVM.jpg "Coinbase, facing SEC lawsuit, says regulator lacks police power over crypto")
NEW YORK, June 29 (Reuters) – Coinbase (COIN.O), the largest U.S. cryptocurrency platform, said it will ask a judge to dismiss the U.S. Securities and Exchange Commission lawsuit claiming it broke the law by failing to register its business.
In a letter filed just before midnight on Wednesday in Manhattan federal court, Coinbase said the SEC has no authority to pursue civil claims because assets trading on its platform are not “investment contracts,” and thus not securities.
“The SEC can pursue its claims only if the tokens and staking services it has identified are ‘securities,’” Coinbase said. “They are not.”
Spokespeople for the SEC did not immediately respond to requests for comment on Thursday.
The SEC sued Coinbase on June 6, saying it made billions of dollars acting as a middleman including by trading at least 13 crypto assets, or tokens, such as Solana, Cardano and Polygon that should have been registered as securities.
Coinbase was also sued over a “staking” program where it pools crypto assets to support activity on the blockchain network, in exchange for “rewards” it provides customers after taking commissions for itself.
The lawsuit was filed one day after the SEC sued Binance, the world’s largest cryptocurrency exchange, accusing it of inflating trading volumes, mishandling customer funds and lying about its operations.
SEC Chair Gary Gensler has been trying to assert jurisdiction over the crypto industry, which he has said undermined investor trust in the U.S. capital markets.
In a separate 177-page filing denying the SEC’s substantive claims, Coinbase said it “welcomes regulation,” but that the regulator was arbitrarily and without Congress’ permission trying to fill the “regulatory gap” over crypto assets.
“Agency enforcement authority is important but not boundless,” it said. “The SEC’s action here is beyond those bounds and unlawful.”
Shares of Coinbase’s parent Coinbase Global rose $1.58, or 2.2%, to $72.33 in afternoon trading on the Nasdaq.
The case is SEC v Coinbase Inc et al, U.S. District Court, Southern District of New York, No. 23-04738.
Reporting by Jonathan Stempel in New York; Editing by Richard Chang
Our Standards: The Thomson Reuters Trust Principles.
World’s popular digital currency rises as high as $99,073 on expectations Trump will ease legal and regulatory hurdles.
Bitcoin is nearing the $100,000 mark as crypto enthusiasts bet that United States President-elect Donald Trump will usher in a more welcoming regulatory environment for digital assets.
The world’s most popular digital currency rose as high as $99,073 on Thursday, extending its surge since Trump’s re-election on November 5.
The commodity has risen more than 60 percent since election day as investors anticipate Trump’s incoming administration to ease regulatory and legal hurdles to its use.
Trump, who called the asset a “scam” during his first term, accepted campaign donations in cryptocurrency, and has pledged to make the US “the crypto capital of the planet” and accumulate a national bitcoin reserve.
Trump and his three sons in September also announced the launch of their own crypto business, World Liberty Financial, which investors have taken as a promising sign of the president-elect’s belief in the sector.
In another bullish signal for the sector on Thursday, United States Securities and Exchange Commission (SEC) chair, Gary Gensler, who was widely disliked among crypto investors for his aggressive enforcement actions targeting the sector, confirmed that he would step down in January.
Trump had pledged to fire Gensler on “day one” of his administration, though the president does not have the authority to remove the SEC chair before the end of his or her term.
While viewed by supporters as a ticket to big returns and financial freedom, Bitcoin and other cryptocurrencies are known for their volatility and have faced government crackdowns in several parts of the world.
After climbing to a record high of $69,000 in late 2021, Bitcoin plunged to less than $16,000 over the following year.
The commodity burst past its previous peak in March after gaining more than 300 percent since November 2022.
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The XRP asset, native to the XRP Ledger (XRPL), has carved out a unique role for itself in the digital currency landscape, as a blockchain optimised for cross-border payments and high-speed transactions.
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