US court allows SEC to proceed with charges against Coinbase

SEC vs Coinbase: A federal judge in Manhattan has given green light for US Securities and Exchange Commission's lawsuit against Coinbase to proceed, albeit with some modifications. While dismissing one claim me by regulator, US District Judge Karine Polk Failla upheld much of SEC's case, suggesting alignment with regulator's stance on cryptocurrency regulation.

Coinbase, largest cryptocurrency exchange in United States, experienced a slight decline in its shares, down approximately 1.5 per cent following announcement. Despite this setback, Coinbase's Chief Legal Officer, Paul Grewal, expressed confidence in exchange's legal position, vowing to contest SEC's allegations.

SEC, on or hand, welcomed court's decision, highlighting continuity of established legal frameworks in identifying securities, reinforcing its oversight role in this domain.

lawsuit, initiated by SEC in June, accuses Coinbase of facilitating tring in several crypto tokens without proper registration, alleging violations of securities laws. While court allowed most of lawsuit to proceed, it dismissed SEC's claim regarding Coinbase's status as an unregistered broker through its wallet application.

legal battle marks a pivotal moment in SEC's regulatory efforts concerning digital asset companies. Employing established legal precedents, including "efforts of ors" test, SEC aims to subject crypto assets to same regulatory scrutiny as tritional securities.

In her ruling, Judge Failla acknowledged SEC's plausible claim that certain digital assets listed on Coinbase may indeed qualify as securities. This decision aligns with previous court rulings favouring SEC's interpretation of securities laws in context of cryptocurrencies.

Unlike commodities, securities necessitate registration with SEC, accompanied by comprehensive disclosures to inform investors of potential risks.

(With Reuters inputs)