In a predictable move, the SEC filed a motion to oppose Coinbase’s motion to dismiss the case on Oct. 3. “It’s more of the same old same old,” said the exchange’s chief legal officer, Paul Grewal.
The SEC sued Coinbase in June, a day after it went after Binance. It accused the firm of selling unregistered securities and providing an unregistered staking service.
However, Grewal said that the agency has no grounds for these claims as crypto assets have not been legally deemed as securities by Congress.
“Over and over again the SEC makes sweeping claims of what the law is/must be without any legal citation.”
Coinbase filed a motion to dismiss the complaint on August 4, arguing that the Commission had violated due process and abused its discretion.
The SEC’s response was predictable as it reiterated the same old arguments that crypto assets are securities, similar to company stocks. Grewal said:
“The assets we list on our platform are not securities and are not within the SEC’s jurisdiction. Court decisions over the past several months have made that plain.”
He added that under the SEC’s claims, “everything from Pokemon cards to stamps to Swiftie bracelets are also securities,” however, this is not the law.
In late September, SEC chair Gary Gensler was questioned by New York Representative Ritchie Torres during a U.S. House Committee on Financial Services meeting.
When asked about a physical Pokémon card, Gensler said it does not qualify as a security. However, his response became muddled when Torres brought up NFT tokenized Pokémon cards.
Crypto lawyer John E. Deaton said:
“After reading the SEC Opposition, the odds have improved in Coinbase’s favor and stands, at least, at 50%.”
Grewal said the SEC’s aggressive policing of the sector ignores large segment of the population that has invested in crypto and could lose money through the torrent of litigation against the industry.
“The SEC’s continued regulation by enforcement approach also ignores the voice of the 52-million strong crypto constituency in the US that wants rules and regulations for this innovative tech.”
Coinbase will file their response to the SEC on October 24.