The arguments of the Securities and Exchange Commission (SEC) that tokens and cryptocurrencies are securities are gaining strength following a final ruling by the Court of the Northern District of California in the United States. Because of this, the bug is becoming a threat to cryptocurrency exchanges Binance and Coinbase.
HE inform that the SEC accused the defendants Crowd Machine and Metavine and their founder Craig Sproule “Sell tokens classified as securities without registration” before the supervisory authority.
The ruling represents a new element in the battle that the SEC has waged against Binance and Coinbase, and that is how Coinbase Legal Director Paul Grewal appears to understand it. criticizes the sentence.
Citing Consensys consultant Bill Hughes' tweet about the recent SEC lawsuit, Grewal asked: “So the tokens themselves are securities once again?”
The question arises in the context of the public hearing that took place last week before Judge Katherine Polk Failla in a United States District Court.
At this moment, Coinbase's lawyers were optimistic about the outcome of the case. Because everyone in the room agreed, including the regulator's legal representatives, that none of the 13 tokens named in the SEC complaint were securities per se.
During the public hearing, Patrick Costello, deputy director of litigation at the SEC, argued that the tokens support a larger “enterprise,” making them similar to an investment contract.
“As the value of the network or ecosystem increases, the value of the (associated) token also increases,” commented Costello. And later, Failla told SEC lawyers that she was “concerned” because The agency asked him to “expand the definition of what a security really represents.”
The SEC then said digital asset buyers, including on secondary exchanges like Coinbase, purchased the tokens and cryptocurrencies as investments similar to stocks or bonds.
However, Coinbase's lawyers disagreed, pointing out that buyers of such tokens did not sign contracts that entitle them to the proceeds of a joint venture.
Cryptocurrencies at the center of the legal dispute
Now Paul Grewal is concerned and wonders whether the arguments Coinbase made at last week's public hearing will be interpreted as “false.”
However, Grewal clarifies that the Crowd Machine and Metavine defendants were “fraudsters,” but adds that the fact that they are does not give the regulator a license to “make false statements in federal court.”
Grewal adds this Such “false statements” could leave Americans even more confused about the regulation. about cryptocurrencies. “The SEC has gotten worse about what it really believes is the law,” he said.
As CriptoNoticias reported at the time, the SEC sued Coinbase last June, alleging that the company facilitated trading in at least 13 cryptocurrencies, including Solana, Cardano and Polygon, which required registration as securities.
Since then, the regulator and the American cryptocurrency exchange have been in a legal battle. The case is also part of a series of lawsuits filed by the SEC against other companies in the cryptocurrency sector.
The agency previously focused on companies selling digital tokens, but under the leadership of President Gary Gensler, it has focused more on exchanges and trading platforms with clearing activities that act as broker-dealers.
Now there are doubts that the American judiciary can dismiss the SEC's lawsuits against Coinbase, Binance and other companies.
This is taking into account that some studies are currently agreeing to deepen the search for elements that prove this Cryptocurrencies are not securitieswhile in others, a ruling is already being made that reinforces the regulator's arguments, which in turn becomes a threat to exchanges that press forward with their litigation.