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SEC Opposes Coinbase’s Motion to Dismiss Lawsuit

5 October, 2023


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The U.S. Securities and Exchange Commission (SEC) has expressed clear opposition to Coinbase Global’s dismissal request. The dismissal motion comes along with a lawsuit against the cryptocurrency exchange platform. This lawsuit in question is requesting the federal judge to deny the request.

The Securities Exchange Commission has argued that Coinbase’s reliance lies on a recent court ruling. The court ruling was in favor of the cryptocurrency developer Ripple Labs Inc. So, in turn, the SEC is claiming that the reliance was misguided.

The ruling in question stated that Ripple did not stand in clear violation of federal securities law while conducting a sale of an XRP token on public exchanges. 

This was interpreted as a victory by the crypto industry. But the SEC has instead brought another ruling into light that revolves around another contradictory case. The Terraform Labs case is the ruling that provides contradictory reasoning to the Ripple case.

Thus, right now, there are multiple questions on the admissibility of the Ripple case due to the prior ruling.

To provide context, we must mention that the Securities Exchange Commission filed a lawsuit against Coinbase in June 2023. The SEC brought about allegations of the Coinbase exchange platform operating illegally. It stated that Coinbase was not registered under the SEC but continued to function as a national securities exchange, broker, and clearing agency.

As a response to these allegations, Coinbase stated that it wanted a clear dismissal of this case in August. According to their counter allegations, the SEC lacked the authority to sue because the digital assets and services that Coinbase deals with do not fall under the purview of the SEC.

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Debkanya is a lawyer turned writer. With an experience of 3 years, she is your go-to source for all things law. She has a soft corner for the US and international section. When the weekend arrives, you'll find her reading up on politics, Austen, or travel blogs over a cup of coffee.

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