In a significant step in its ongoing legal battle with the SEC, Coinbase has filed a motion requesting that the Commodities Futures Trading Commission (CFTC) provide communication records with the issuers of 12 tokens involved in the case. The Exchange believes these documents could be vital in defending against SEC accusations that these tokens are unregistered securities.
The motion was filed in the Southern District of New York (SDNY) on October 2, according to Coinbase Chief Legal Officer Paul Grewal. Grewal announced the filing through an X post, emphasizing the potential importance of these documents in the ongoing lawsuit. The case deals with the fact that the SEC accused Coinbase of listing and selling these tokens in direct violation of compliance laws, even though the tokens are purported to meet securities in terms of the Howey Test.
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Judge’s Order and Coinbase’s Legal Strategy
The request follows a recent decision by U.S. Judge Katherine Polk Failla, who ordered the SEC to disclose its communications with the issuers of the 12 tokens. The judge made the order on September 5 after Coinbase had asked the SEC to provide internal documents that included memoranda that contained the agency’s Howey analysis. These disclosures may explain how the SEC classified the tokens as securities.
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Coinbase is now expanding this strategy and going after the CFTC, asking for records of the CFTC’s conversations with the same token issuers. The Exchange also wants the CFTC’s communications to clarify the regulatory status of the tokens, something that might not sit well with the SEC’s assertion that the assets are investment contracts.
Coinbase’s Motion Could Impact Case Outcome
Coinbase’s legal team argues that the CFTC documents could determine whether the tokens qualify as securities. If these communications reveal differing views from the CFTC regarding the classification of the tokens, they could strengthen Coinbase’s defense. By seeking these records, Coinbase hopes to build a more robust case against the SEC’s allegations.
Conclusion
As the legal proceedings between Coinbase and the SEC continue to unfold, the Exchange’s latest motion adds another layer to the ongoing regulatory debate surrounding digital assets. This motion’s outcome could significantly impact future cryptocurrency regulations, especially regarding the classification of tokens under U.S. law.
Also Read: Jesse Pollak Appointed to Lead Coinbase Wallet as Part of Executive Team
Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.