Cryptocurrencies

The US Securities and Exchange Commission (SEC) opposed the cryptocurrency exchange’s application

The US Securities and Exchange Commission (SEC) has opposed cryptocurrency exchange Coinbase’s request to file an interlocutory appeal over a “control question” in the ongoing lawsuit, alleging that Coinbase seeks to manipulate the interpretation of the question itself.

“Coinbase’s attempts to manipulate the question on appeal into a question that can be certified under 28 USC § 1292(b) are self-defeating,” the SEC declared in a May 10 filing with the US District Court for the Southern District of New York. Wales. York.

The SEC also asserted that Coinbase “does not like” the Howey Test — the agency’s standard for determining what a security is — and the current framework for securities regulation, choosing to set up its business in potentially costly ways to follow existing laws.

“Coinbase doesn’t like to answer. “After reporting the weather, Coinbase can now no longer complain about the rain.”

This comes after Coinbase filed an interlocutory appeal on April 12 arguing that the investment contract cannot exist without an after-sales commitment.

Since the SEC disagrees, Coinbase claims that whether or not it will do so is a controlling question – a key legal issue that could strongly influence the outcome of the case.

However, the SEC said that Coinbase is only claiming that this is a controlling question because the exchange cannot provide a clear explanation of what constitutes a “contractual covenant.”

The SEC asserted that “Coinbase remains unable to present a single coherent version of this theory, which it now claims represents a controlling question.”

Court filing with the United States District Court for the Southern District of New York. Source: Court Listener

But the SEC said that in 80 years, no court has ever required “contractual representations” after a sale.

“A preliminary review is not warranted simply because Coinbase proposes a new legal test and disagrees with the court’s rejection of that test,” the SEC noted.

“But Coinbase’s decision to do so, and its desire to rewrite decades-old established legal precedent to suit its own policy goals and business needs, do not provide a compelling reason to prematurely certify the appeal in this case,” she added.

Related: Coinbase is facing a new lawsuit over allegedly defrauding investors

The Securities and Exchange Commission sued Coinbase in June 2023, saying the cryptocurrency exchange violated federal securities laws by listing 13 tokens that it claimed were securities.

Coinbase has argued that transactions on its exchange should not be considered securities, claiming that they fall outside SEC regulations. However, the Securities and Exchange Commission has the opposite opinion.

“At least some transactions on the Coinbase platform and through related services constitute ‘investment contracts,’ which federal securities laws have long recognized as securities,” the SEC stated in court documents dated March 27.

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