Coinbase has filed an argument in its final bid to drop the SEC’s crypto authority’s regulatory suit

The United States Securities and Exchange Commission has exceeded its authority in classifying Coinbase-listed cryptocurrencies as securities.

In a filing Oct. 24 in New York District Court, Coinbase challenged the SEC, arguing that the definition of what qualifies as a security is too broad and that the exchange's listings are not under the regulator's control.

“The SEC's jurisdiction is limited to securities transactions. Not every potential capital separation is eligible, and transactions on Coinbase are only securities transactions if they involve ‘investment contracts'. Transactions are not at issue here.

Coinbase says the SEC can only do what Congress can do under the substantive inquiries doctrine, a “radical expansion of its own authority” and authority “over essentially all investment activities.”

In an Oct. 24 X post, Coinbase Chief Legal Officer Paul Grewal echoed the claims, saying the SEC's definitions have “no restrictive function.”

Any purchase in which the buyer hopes to increase the value of an investment is an investment contract – and therefore a security – the SEC is trying to radically expand its authority. The key questions are that only Congress can do that, as the doctrine makes clear. 2/3

— paulgrewal.eth (@iampaulgrewal) October 24, 2023

Coinbase's latest filing comes in response to the SEC's October 3, where the court asked Coinbase to dismiss Coinbase's dismissal motion, reiterating its belief that the various cryptocurrencies listed by Coinbase were investment contracts under the Hawaii test.

Related: Security regulators oppose special treatment of crypto in Coinbase case

The SEC sued Coinbase on June 6, alleging the exchange violated U.S. securities laws by listing several securities claims and failing to register with the regulator.

Coinbase filed the lawsuit on June 29 alleging the SEC is abusing its power and violating Coinbase's due process rights.

Judge Kathryn Polk, who is overseeing the case, has filed for Coinbase and the SEC to go to court for oral arguments and can move to rule on the case, dismiss it or have it go to a jury.

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