Challenges Mount for Coinbase as US State Regulators and Legal Experts Back SEC in Unregistered Exchange Claim
Coinbase, one of the leading cryptocurrency exchanges in the United States, faced increased challenges on Tuesday as US state regulators and legal experts supported federal securities regulators in their claim that the crypto giant operated unlawfully as an unregistered exchange. This reinforced support for the Securities and Exchange Commission (SEC) sheds further light on a case that is increasingly seen as crucial for the world of cryptocurrency.
The SEC’s theory in this case is consistent with the agency’s longstanding public position and falls within the bounds of established law.
The Significance of Crypto Under Scrutiny
Despite the growing attention that cryptocurrencies receive from the media and regulatory bodies, the North American Securities Administrators Association (NASAA) argues that this attention masks the low magnitude and relevance of digital assets within the broad spectrum of the US economy. Todd Phillips and Beau Baumann, two legal scholars, have reinforced this sentiment by outlining the inapplicability of a legal doctrine invoked by Coinbase.
In supporting the pro-government narrative, the New Finance Institute has highlighted the framework for investor protection, implying that cryptocurrency tokens should not be regarded as investments. However, the institute clarified that such acquisitions still fall under investment contracts.
With increasing pressure from the SEC on various crypto platforms such as Coinbase, Binance, and Bittrex, and state-level actions from states like Alabama and California, the legal battle over the jurisdiction and nature of cryptocurrencies appears far from resolved.