SEC insists Coinbase ‘doesn’t like the answer’

The United States Securities and Exchange Commission (SEC) has denied Coinbase's request for an interlocutor's appeal regarding a “regulatory request” in an ongoing lawsuit that claims Coinbase is seeking to control its own interpretation of the request.

“Coinbase's attempt to shoehorn itself into a certified claim pursuant to 28 USC § 1292(b) is self-defeating,” the SEC said in a May 10 filing with the US District Court for the Southern District of New York. .

The SEC also reiterated that Coinbase “doesn't like” the Hawaii test — used to determine what the agency's level of security is — and reiterated that the current securities regulatory framework is set up in a way that could make it “expensive” for businesses to comply. laws.

“Coinbase doesn't like the answer. After working on the weather, Coinbase can't complain that it's raining now.

It comes after Coinbase filed an interlocutor appeal on April 12, arguing that an investment contract cannot exist without a post-sale obligation.

While the SEC disagrees, whether or not Coinbase does so is a regulatory question — a key legal issue that could have a significant impact on the outcome of the case.

However, the SEC cannot provide a clear explanation of what constitutes a “contractual agreement” and Coinbase has argued that this is only a regulatory question.

“Coinbase has failed to advance a single, consistent version of this theory, which is a question it now controls,” the SEC confirmed.

However, the SEC said in 80 years, no court has ever asked for “contractual operations” after the sale.

“Interlocutory Review is not warranted simply because Coinbase disagrees with the idea of ​​a new legal challenge and the court's rejection of that challenge,” the SEC explained.

“However, Coinbase's decision to do so and its willingness to rewrite a loose and decades-old legal precedent to suit its own policy goals and business interests provide no compelling reason to prematurely certify an appeal in this case,” he added.

Related: Coinbase faces new lawsuit over alleged investor fraud

The SEC sued Coinbase in June 2023, listing 13 tokens the cryptocurrency exchange claimed were securities and violating federal securities laws.

Coinbase has argued that transactions on its exchange should not be considered securities, saying they fall outside SEC regulations. However, the SEC holds the opposite opinion.

“At least some transactions on the Coinbase platform and through related services constitute “investment contracts,” which are long-term securities recognized by the federal securities laws,” the SEC said in a March 27 court filing.

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