Coinbase is asking a court to dismiss the U.S. Securities and Exchange Commission’s (SEC) lawsuit against the top US-based crypto exchange.
In a new thread, Paul Grewal, Coinbase’s chief legal officer, says that the crypto firm is seeking to discard the lawsuit because they believe the regulatory agency is violating due process.
According to Grewal, the SEC is ignoring a decades-long precedent established by the Supreme Court.
“Today, Coinbase filed our brief asking the Court to dismiss the SEC’s case against us. Our core argument is simple – we do not offer ‘investment contracts’ as that term has been construed by decades of Supreme Court and other binding (precedents).
By ignoring that precedent, the SEC has violated due process, abused its discretion, and abandoned its own earlier interpretations of the securities laws. By ignoring that precedent, the SEC has trampled the strict boundaries on its basic authority set by Congress.”
In July, a judge said that the SEC could have given Coinbase a warning that it might be in violation of securities laws before approving the firm’s application to go public.
The judge also said it made sense for the crypto exchange to believe it was in the clear as it received no notice from the SEC before green-lighting its initial public offering.
A couple of weeks later, Coinbase was ordered by the SEC to halt all non-Bitcoin (BTC) trading ahead of the lawsuit. According to Coinbase CEO Brian Armstrong, the SEC has deemed all digital assets other than BTC as securities and won’t elaborate on the legal basis for such a decision.
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