Coinbase has reportedly asked the United States Court of Appeals to rule that crypto asset exchanges on its platform are not securities transactions, but asset sales.
The company said this in a court filing that is part of an appeal related to a Securities and Exchange Commission (SEC) lawsuit filed in 2023 that alleges Coinbase operated as an unregistered securities broker-dealer, a reported Seeking Alpha on Wednesday, January 22.
Coinbase said in its petition that transactions on its platform are not securities transactions because buyers do not obtain rights against the issuer of the asset as they do for stocks, bonds and other securities, according to the report.
A ruling on this issue “will allow the Court to clear the cloud currently hanging over the cryptocurrency market,” the company said, according to the report.
The SEC sued Coinbase in June 2023, claiming the platform let its own users trade unregistered securities.
Gurbir S. Grewal, who was director of the SEC’s Enforcement Division at the time, said in a press release announcing the lawsuit: “You can’t just ignore the rules because you don’t don’t like them or because you prefer different rules. these: the consequences for the investing public are far too serious.”
In a statement provided to PYMNTS at the time, Paul Grewal, Coinbase’s chief legal officer and general counsel, said: “The SEC’s reliance on an enforcement-only approach in the absence of clear rules for the digital assets industry harms to America’s economic competitiveness and to companies like Coinbase that have demonstrated their commitment to compliance.
In September, in a thread posted on X, Paul Grewal wrote that the SEC had refused to provide regulatory guidance while engaging in an “arbitrary” enforcement campaign.
“Regulation by enforcement only harms American consumers, innovation, American competitiveness, and our national security,” Paul Grewal wrote. “Coinbase is committed to leaving no stone unturned in our efforts to bring clarity to our industry and the millions of Americans who hold cryptocurrencies.”
On Tuesday, January 21, the SEC, now led by Acting Chairman Mark T. Uyeda, launched a crypto task force focused on developing a “comprehensive and clear” regulatory framework for crypto assets.
