In a recent legal development, Coinbase, the leading cryptocurrency exchange, has strengthened its position in its ongoing legal battle against the SEC. Lawyers representing Coinbase submitted a reply memorandum of law to the District Court.
The filing challenges the SEC's expansive interpretation of the term "investment contract" in the SEC v. Coinbase case, asserting that the SEC's argument is legally unsustainable.
Godfrey BenjaminChief Legal Officer at Coinbase Paul Grewal emphasized that the SEC's attempt to classify any purchase with the anticipation of value increase as an investment contract, and consequently a security, exceeds the commission's jurisdiction.
Grewal argued that such a radical expansion of authority can only be sanctioned by Congress, per the major questions doctrine.
Odds
Prominent lawyer and founder of CryptoLaw, John Deaton, supported Coinbase's stance, lauding the simplicity and brilliance of the reply brief. Deaton expressed confidence in the exchange's prospects, stating that the company has a real chance of success in the District Court.
He estimated the odds of a Coinbase victory at over 50% at the District Court level, over 60% at the 2nd Circuit level, and over 80% at the Supreme Court level. Deaton's assessment underscores the belief that the exchange is well positioned to prevail against the SEC's allegations.
Alex DovbnyaExperts anticipate that Judge Failla could potentially grant Coinbase's motion, particularly concerning asset sales. If successful, this case could set a significant precedent for the cryptocurrency industry, clarifying the regulatory landscape for digital asset transactions.
Dan Burgin
Alex Dovbnya