Coinbase knew it may have been violating the law court document reveal

According to recently filed court documents, the U.S. Securities and Exchange Commission (SEC) claims that Coinbase, a leading crypto exchange, was aware of potential securities law violations prior to the regulatory lawsuit.

The SEC argues in the court filing that Coinbase made a calculated decision to continue its operations despite knowing that it might be engaging in illicit activities. The regulator highlights that Coinbase actively discouraged crypto asset issuers from using language associated with securities in their marketing materials.

Furthermore, the SEC points out that Coinbase, as a publicly traded company, consistently informed its shareholders about the risk that the crypto assets traded on its platform could be considered securities, potentially violating federal securities laws. The SEC notes that Coinbase itself acknowledged the possibility of its conduct being viewed as in violation of securities laws in its registration statement, which Coinbase now references as evidence of the SEC’s endorsement.

The SEC filed a lawsuit against Coinbase last month, alleging that the exchange sold unregistered securities by classifying certain crypto assets, including Cardano (ADA), Solana (SOL), and Polygon (MATIC), as securities.

Coinbase responded by submitting a motion to dismiss the case at the end of June, arguing that the SEC lacked jurisdiction in the matter.