SEC succeeds in taking Coinbase to a jury at trial

Just a few days after Ripple said that SEC is doomed in its efforts to regulate certain cryptocurrencies in the way it has been trying, the watchdog has won an important victory

The Securities and Exchange Commission (SEC) has won a lawsuit against Coinbase on Wednesday, as a judge sided with the regulator and confirmed that the cryptocurrency exchange would have to face a jury at trial to determine whether it had been selling unregistered sales of securities.

SEC brought its case against one of the largest cryptocurrency exchanges in June at a time of resurging Bitcoin which has prompted a $11bn short-selling frenzy that the market rally will not last. Coinbase lost 2.5% of its stock value following the announcement that the case would proceed, and the exchange’s request to dismiss the case had not been honored by US District Judge Katherine Polk Failla.

“The Court finds that the SEC adequately alleges that Coinbase, through its Staking Program, engaged in the unregistered offer and sale of securities,” Judge Failla said in her statement outlining why the case ought to move forward. In a response posted on social media platform X, Coinbase chief legal officer Paul Grewal said that the company was prepared for the next stage of the process.

“We were prepared for this, and we look forward to uncovering more about the SEC’s internal views and discussions on crypto regulation,” he said, welcoming this as an opportunity to further clarify the regulatory status of cryptocurrencies.

SEC Chair Gary Gensler has already offered criticism of how cryptocurrency exchanges take the term “exchange” and usually expand it to feature many different functions that are not always a necessary part of what an exchange does.

“We don’t see the New York Stock Exchange operating a hedge fund,” Gensler explained earlier this year as part of the SEC’s public statements on the matter.

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Written by Barney

Co-founder

Barney is co-founder of CryptoGamblingNews.com. When not at work he can usually be found behind a Nikon. He's won numerous international competitions for his photography and volunteers as a content creator for aid organisations in Africa.

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