According to a recent court order issued on Thursday, June 29, the United States Securities and Exchange Commission (SEC) is scheduled to deliver its response to Coinbase’s initial legal defense on July 13.
The SEC has also filed a request with the court, seeking a three-business-day extension, as mentioned in a legal document filing.
Taking a stronger position
Coinbase’s legal counsel argued in a recent court letter that the company has presented various defenses in response to the SEC’s complaint, including claims of due process violation and abuse of discretion. They further contended that there is a fundamental issue with the SEC’s case, which the chair acknowledged two years ago, asserting that Coinbase should be entitled to judgment on the pleadings as the subject matter falls outside the SEC’s authority.
As a result, a conference has been scheduled for July 13, during which the judge will decide whether Coinbase will be allowed to proceed with its motion for judgment on the pleadings at this stage. Usually considered a procedural step, permission is typically granted unless the opposing party presents compelling reasons to the contrary.
Although filing a response ahead of the August 7, 2023 deadline is not uncommon in such cases, legal experts have viewed Coinbase’s early filing as a creative strategy. MetaLawman, a lawyer and Twitter legal commentator, explained that Coinbase’s tactic is designed to introduce supportive documents before the Judge through their response, aiming to strengthen their position.
This comes just one day after Coinbase submitted a comprehensive 177-page response to the Securities and Exchange Commission’s (SEC) complaint, asserting that the SEC did not possess the necessary regulatory authority to supervise digital assets.
Larger implications
The SEC’s lawsuit, filed in June, accused Coinbase of functioning as an unregistered broker, national securities exchange, and clearing agency. Additionally, the legal action addressed Coinbase’s staking program and categorized 13 tokens, including DASH, NEXO, FLOW, SOL, and ADA, as securities.
The outcome of this lawsuit and how it impacts Coinbase could have wider consequences for other cryptocurrency exchanges and platforms operating within the United States. It may set precedents regarding regulatory oversight and the classification of certain tokens as securities.
The resolution of this case could potentially shape the regulatory landscape for the cryptocurrency industry, affecting compliance requirements, trading activities, and investor protection measures.
As a result, industry participants and stakeholders will closely monitor the developments in this lawsuit, as it could potentially influence the regulatory framework and practices for cryptocurrency businesses operating in the United States.
