-

Coinbase to argue crypto assets not securities in court hearing

Coinbase will argue in a court hearing today that the crypto tokens traded on its platform should not be classified as securities subject to SEC regulation. The exchange aims to convince the judge that the …

Coinbase will argue in a court hearing today that the crypto tokens traded on its platform should not be classified as securities subject to SEC regulation. The exchange aims to convince the judge that the regulator has overstepped its authority in suing Coinbase.

The Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase in June. The regulator alleges the exchange allowed trading in 13 digital assets that should have been registered as securities. The SEC also claims Coinbase operated illegally by not registering with it as an exchange, broker and clearing agency.

In addition, the lawsuit targets Coinbase’s “staking” program that allows users to verify blockchain activity in exchange for rewards. The SEC says this should have been a registered service.

Coinbase strongly denies the allegations. In an August court filing, the exchange asked the judge to dismiss the case, citing a recent ruling favouring Ripple Labs. A judge found Ripple did not violate securities law by selling its XRP token on exchanges.

Read More News:
Bitcoin ETF frenzy fizzles as inflows halve overnight

Other crypto companies share Coinbase’s view that most digital assets do not constitute securities. They resist the SEC’s efforts to bring crypto under its oversight through lawsuits focused on trading platforms and clearing services.

The Coinbase hearing outcome could influence the SEC’s ability to regulate cryptocurrencies. A decision validating Coinbase’s stance would be a major victory for the crypto industry.

Sign up for Investomania

Subscribe to the Investomania newsletter to have our daily recap delivered directly to your inbox.

No spam. Unsubscribe anytime.