Coinbase has asked the court to dismiss the SEC’s lawsuit based on the ruling in the Binance case

What’s new? Leading US centralized crypto exchange (CEX) Coinbase is seeking a review of a lawsuit the US Securities and Exchange Commission (SEC) filed last year for offering unregistered securities in the form of tokens. Coinbase cited the court’s recent decision in the SEC’s case against the Binance exchange as its argument.

Source: X.com

What else is known? On June 6, 2023, the SEC charged Coinbase with offering unregistered securities, which included SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO tokens, and operating without registering as an exchange, broker or clearing agency. Similar charges were filed against Binance on June 5 of the same year.

In late June of this year, Judge Amy Berman Jackson of the US District Court for the District of Columbia partially dismissed the SEC’s lawsuit, granting Binance’s motion to dismiss charges related to secondary sales of the BNB exchange token and the Simple Earn program. In her decision, she cited Judge Annelise Torres, who ruled in SEC v. Ripple that secondary sales of XRP tokens did not violate securities laws.

Coinbase lawyer Paul Grewal noted that the ruling completely refuted the SEC’s claim that secondary market transactions involving the BNB token on Binance were investment contracts.

Coinbase calls the court’s decision to recognize cryptocurrencies in secondary sales as securities unweighted

This ruling was made in absentia following the SEC’s settlement agreement with a former Coinbase manager in an insider trading case

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Grewal emphasized that “Liability shouldn’t depending on what what court you get sued in or what judge is assigned to your case.” That said, in March of this year, New York District Court Judge Katherine Failla denied Coinbase’s motion to dismiss the SEC’s lawsuit.

The lawyer notes that the two district courts, after analyzing economically identical transactions at the two largest cryptocurrency exchanges in the US, came to diametrically opposed views on whether they counted as securities transactions. Coinbase believes that the decision should be reconsidered based on the decision in the Binance case.

Grewal also again criticized the SEC’s approach to regulating the crypto industry through litigation. According to the lawyer, the upshot has been that market participants face different interpretations of the rules in different courts not only within the District, but across the country.

US court refuses to recognize the secondary sale of cryptocurrencies on Coinbase as securities trading

The decision concerns an investor class action lawsuit dated March 2022

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In late June of this year, Coinbase sued the SEC and the Federal Deposit Insurance Corporation (FDIC) for refusing to provide internal documents about investigations into crypto companies, which violates the Freedom of Information Act.