On Wednesday, Judge Failla of the Southern District of New York denied Coinbase’s motion to dismiss the Securities and Exchange Commission’s lawsuit against the exchange. The SEC accuses Coinbase of operating as an unregistered exchange, broker, and clearing agent and alleges that Coinbase’s staking program engages in the offering and sale of unregistered securities.
Ripple CLO remains bullish
Despite this setback for Coinbase, Ripple’s Chief Legal Officer Stuart Alderoty suggests that this legal battle is only in its early stages.
Alderoty said via Judge CB gave the SEC the benefit of the doubt at an early stage, as it should have. “It’s still far from over.”
His comments echo the sentiments of Paul Grewal, Coinbase’s chief legal officer. express His take: “Today the court decided that the SEC case will proceed on most claims, but dismissed the claims against Coinbase Wallet. We’ve been preparing for this, and look forward to discovering more about the SEC’s internal views and discussions on cryptocurrency regulation. (…) Going forward, we remain confident in our legal arguments and eagerly await the opportunity to obtain evidence from the SEC for the first time.”
What’s next for Coinbase and Coinbase? secretary
Following Judge Failla’s ruling, questions about Coinbase’s future have been a topic of considerable interest. FOX Business journalist Eleanor Terrett said: shine a light What’s Next: “What’s New: What’s next for Coinbase following Judge Failla’s ruling? The court will set a full discovery schedule and both sides may request documents for the discovery process.
Terrett added: “A familiar source added, ‘Some of these cases may be undermined or exposed through discovery, so Coinbase will attempt to obtain as much discovery as possible from the SEC during this process, and the SEC will do the same.”
She also drew parallels with the discovery process in the Ripple case, which provided unprecedented insight into the SEC’s internal view of Ripple and the broader cryptocurrency market. The discovery process, summary judgment brief filings, and potential trial are expected to extend the legal proceedings between Coinbase and the SEC for more than a year.
In the meantime, Coinbase may explore the option of filing an “interlocutory appeal” of any or all of the motion to dismiss, depending on the strategic judgment of its legal team. This route was previously attempted by the SEC in the Ripple case following Judge Torres’ summary judgment decision, but ultimately failed due to strict standards for interlocutory appeals before final ruling.
Carlo.eth, a prominent member and defender of the Ethereum community, commented on the strategic importance of Coinbase’s discovery phase: “I think Coinbase welcomes the full discovery opportunity it gets from the SEC’s inside look. “It will give us a lot of momentum moving into the summary judgment phase.”
At press time, COIN was trading at $256.7, down about -9% since the news broke.
Featured image from YouTube/Minority Corporate Counsel Association, chart from TradingView.com