Coinbase's Defense Falters: Latest Developments In SEC Legal Battle
April 16, 2024 at 10:11 am EDT
Share
A New York federal court has held that the SEC sufficiently pleaded that Coinbase—a well-known cryptocurrency exchange, broker, and clearing agency—operated as an unregistered intermediary of securities and engaged in the unregistered offer and sale of securities through its crypto staking program. In a partial win for Coinbase (and possibly others offering wallet services), the court dismissed the SEC's claim that Coinbase acted as an unregistered broker by offering a crypto wallet application to its customers. The case is Sec. and Exch. Comm'n v. Coinbase, Inc., 23 Civ. 4738 (S.D.N.Y. Mar. 27, 2024).
This decision has important ramifications for all players in the crypto market, as it clears the way for the SEC to continue to act as the primary regulator of crypto in the absence of further regulatory direction from Congress and allows the SEC to continue aggressive enforcement in the crypto space.
To read the full text of this post by Duane Morris'Mauro Wolfe , Vincent Nolan and Alek Smolij, please visit the Duane Morris Fintech Blog.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
Mr Duane Morris
Duane Morris LLP
470 Atlantic Avenue
Suite 500
Boston
MA 02210
UNITED STATES
E-mail: solutions@duanemorris.com
URL: www.duanemorris.com
Coinbase Global, Inc. is a holding company of Coinbase, Inc. and other subsidiaries. The Company provides platform, which enables its users to engage in a variety of activities, including discovering, trading, staking, storing, spending, earning and using their crypto assets. The Company offers a suite of products and services that are designed to meet the distinct needs of its three customer groups: consumers, which includes individual retail user customers seeking to discover or trade crypto assets and engage in on chain activities; institutions, which are businesses that include market makers, asset managers, hedge funds, banks, wealth platforms, registered investment advisors, payment platforms, and public and private corporations; developers, which comprise of developers, creators, merchants, crypto asset issuers, organizations and financial institutions, and other groups building decentralized protocols, applications, products, or other services on chain.