Coinbase has taken a bold step in its legal battle against the U.S. Securities and Exchange Commission (SEC) by filing a motion to dismiss the recent lawsuit filed against it.
The SEC alleged that Coinbase facilitated unregistered trading of 12 digital tokens classified as securities. However, Coinbase strongly contested the claims and argued that the SEC’s interpretation of securities laws went beyond established legal frameworks.
In its motion to dismiss, Coinbase highlighted concerns about the SEC’s authority and asserted that the lawsuit violated the company’s due process rights.
Coinbase, in its legal document filed with the U.S. District Court for the Southern District of New York, questioned the SEC’s interpretation of securities laws and raised doubts about the agency’s legal authority.
The company argued that the SEC’s claims extended far beyond existing law and called for the lawsuit to be dismissed on independent grounds.
Coinbase’s legal team firmly stated that the SEC’s actions constituted an “extraordinary abuse of process” and infringed upon the company’s due process rights.
Highlighting the discrepancy between Coinbase’s perspective and the SEC’s claims, the exchange contended that the digital assets mentioned in the lawsuit were not securities.
Coinbase firmly stated that none of the assets identified by the SEC met the criteria to be classified as securities. The legal document further emphasized that secondary transactions involving these assets should also not be considered securities.
Coinbase pointed out inconsistencies in the SEC’s decisions, noting that the agency had previously raised no objections to six of the mentioned tokens during their previous dealings with Coinbase in 2021.
Coinbase’s legal team also referenced the SEC’s approval of the company’s registration statement in 2021, which allowed Coinbase to sell its shares to investors when it went public.
This raised questions about the SEC’s shifting stance on the tokens in question, as the agency had not objected to them during their earlier interactions with Coinbase.
