Coinbase has asked a judge to dismiss the Securities and Exchange Commission (SEC) case against it, claiming the regulator is overstepping its jurisdiction. In a filing on Friday, Coinbase argued that the SEC is not claiming that any of the 13 tokens it named as examples of coins that meet the requirements of securities involve investment contracts. The transactions over Coinbase’s platform and Prime are not, and do not involve, contractual undertakings to deliver future value reflecting the income, profits, or assets of a business. They are commodity sales, with the obligations on both sides discharged entirely the moment the digital token is delivered in exchange for payment, the filing said.
Coinbase pointed to the recent ruling in the SEC’s case against Ripple, which found that Ripple’s programmatic sales of XRP were not securities transactions, while its direct sales to institutional clients were. The filing also mentioned the Major Questions Doctrine, which Coinbase believes would vastly expand the regulator’s jurisdiction to include the cryptocurrency industry.
Chief Legal Officer Paul Grewal said during an earnings call on Thursday that Coinbase expects to win the case. We expect to win. But it’s important to understand that our goal across not just the litigation but all of our efforts engaging with the SEC and engaging with the U.S. government as a whole is to achieve regulatory clarity to protect consumers, promote innovation and essentially establish clear rules of the road that everyone can understand and follow, Grewal said.
The SEC has until Oct. 3 to file a response to Coinbase’s motion, and any amicus briefs supporting Coinbase can be filed until Aug. 11.