Coinbase, the world’s second-largest crypto exchange by trading volume, has asked a federal judge to dismiss the Securities and Exchange Commission’s (SEC) litigation against it.
The SEC sued Coinbase, the largest publicly-traded crypto exchange in the world, on June 6. The regulator accused the firm of operating as an unregistered broker since 2019. It also claimed that Coinbase merged three functions that are typically separated in traditional securities markets: broker, exchange, and clearing agency.
Coinbase Argues It Does Not Offer “Investment Contracts”
At the crux of the SEC’s argument is that the crypto assets that Coinbase sold had the “characteristics of securities.”
In a Manhattan court filing, Coinbase asserted that the SEC lacks authority for the lawsuit as the disputed assets are not securities. One of the key characteristics of a security, under the Howey Test, is that it involves an “investment…
