The ongoing legal battle between Coinbase and the U.S. Securities and Exchange Commission (SEC) is poised to determine the fate of several crypto tokens within the United States. The SEC initiated the case against Coinbase in June 2023, marking one of the most significant court battles in the crypto space, with the classification of 13 tokens at stake.
During the recent court hearing on January 17, both parties presented arguments to Judge Katherine Polk Failla regarding the dismissal or continuation of the case. The judge displayed a thorough understanding of the crypto industry, repeatedly pressing SEC attorneys to justify when and why the tokens should be considered securities.
Coinbase’s legal team countered the SEC’s claims by disputing the labeling of networks and crypto communities as a “common enterprise” and rejecting comparisons between crypto tokens and stocks. They argued that token purchases on the secondary market lack the rights associated with stock transactions.
Judge Failla has yet to decide whether the case will proceed or if Coinbase’s motion for dismissal will be granted. Notably, her background includes dismissing a case against Uniswap in 2013, where the exchange was accused of selling “scam tokens.”
The judge’s decision is crucial, as it will impact the industry, businesses, regulations, and individuals within and outside the United States. Judge Failla expressed concerns about limiting the SEC’s authority to oversee the crypto space and reservations about classifying a new technology lacking regulatory clarity from Congress.
In addition to the Coinbase vs. SEC case, this week’s Crypto Biz explores other notable developments, including VanEck’s decision to delist its Bitcoin Strategy ETF, changes in IRS rules exempting crypto transactions over $10,000, the impressive performance of Bitcoin ETFs, and Core Scientific’s exit from bankruptcy and plans to relist shares on the Nasdaq.