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Coinbase (COIN.O) has formally requested a federal judge to terminate the ongoing legal case initiated by the U.S. Securities and Exchange Commission (SEC), asserting that the cryptocurrency exchange has violated U.S. regulations. The company submitted its legal brief to a federal court located in New York as part of its defense. The SEC had taken legal action against Coinbase in June, contending that the exchange had been engaged in unauthorized activities functioning as a national securities exchange, broker, and clearing agency without obtaining the required registration from the regulatory body.
The heart of Coinbase’s defense centers on the contention that the products and services it provides do not fall under the legal definition of “investment contracts,” a term that has been established through decades of rulings by the Supreme Court and other legally binding precedents. This argument was succinctly articulated by Coinbase’s Chief Legal Officer, Paul Grewal, who conveyed the company’s stance via a statement shared on Twitter. Grewal asserted that the company’s offerings are not accurately classified as investment contracts according to established legal standards.
The legal dispute has garnered substantial attention due to its potential implications for the broader cryptocurrency and regulatory landscape. The outcome of this case could potentially set a precedent for how cryptocurrency exchanges are regulated and defined under U.S. law. The evolving nature of the cryptocurrency market, combined with its intricate relationship with existing financial frameworks, has spurred debates over appropriate regulatory measures.
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