Coinbase and Ripple Labs are seeking to use their case against the U.S. Securities and Exchange Commission to cite a recent order that Binance won regarding the way it handled secondary cryptocurrency sales.
In the past few days, Coinbase and Ripple have both pointed to a lack of clarity in their respective lawsuit filings about how cryptocurrencies are regulated.
Coinbase told the court that “Binance further supports the SEC’s call to engage in regulation of digital assets.” filing Tuesday. “As Coinbase explained, the reason rulemaking is necessary here is because the SEC has adopted a new, comprehensive, but still unclear view of the securities laws. The SEC has never been consistent in its explanations, but it is attempting to impose them retroactively on the digital asset industry through a scorched-earth enforcement campaign.”
This was largely decided by Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia. Rejected Binance attempted to dismiss the lawsuit it filed with the SEC last week, but rejected some of the SEC’s claims, including that the secondary sale of BNB constituted a security.
Despite Judge Jackson’s ruling to proceed with nearly all of the SEC’s claims, legal experts in the cryptocurrency industry welcomed the dismissal of the secondary sales allegations, saying the order gave the general impression that rulings on cryptocurrencies should be made on a case-by-case basis.
Coinbase said in a filing with the Third Circuit Court of Appeals that Judge Jackson’s opinion “exacerbated the industry confusion the SEC had created.” Binance’s opinion confirms that the court should direct the SEC to begin rulemaking, Coinbase added. The court is evaluating: example Taken from Coinbase In April 2023, exchanges are expected to respond in favor or against a petition to establish rules for the cryptocurrency industry.
Coinbase made a similar statement on Monday, using Binance’s order as leverage in its lawsuit against the SEC, accusing it of operating as an unregistered exchange.
“This underscores the urgent need for an appellate review to ensure clarity in the application of securities laws and the regulation of cryptocurrency market participants,” Coinbase said. filing.
Ripple Labs also filed a “supplementary motion” on Tuesday, citing Judge Jackson’s position that cryptocurrencies do not fit “neatly” into the Howey opinion and that deciding to oversee the cryptocurrency industry on a case-by-case basis “is probably not the most efficient way to proceed.”
The rule is based on a 1946 U.S. Supreme Court case often cited by the SEC to determine whether an asset is considered an investment contract and therefore a security.
“These observations support Ripple’s argument that providing clarity on the legality of various types of XRP sales is the most important aspect of the court’s summary judgment decision,” Ripple said in its filing.
The SEC and Ripple have been fighting in court for years after the SEC accused Ripple of raising $1.3 billion by selling XRP. The SEC claims XRP is an unregistered security. Last year, New York Judge Analisa Torres Rule over She argued that some of Ripple’s XRP sales (programmatically) did not violate securities laws because they involved a blind bidding process. However, she ruled that other sales, which involved selling tokens directly to institutional investors, were securities.
The SEC’s lawsuits against Coinbase, Ripple, and Binance are ongoing. A rescheduling conference for the agency’s lawsuit against Binance is scheduled for July 9. SEC I sued Binance and its former CEO Changpeng Zhao last year accused the cryptocurrency exchange of lying to customers, failing to restrict U.S. investors from accessing Binance.com, misusing capital for a segregated investment fund owned by Zhao, and operating as an unregistered exchange.
Zhao is currently in prison on charges brought by the Ministry of Justice.
Disclaimer: The Block is an independent media outlet providing news, research and data. As of November 2023, Foresight Ventures is the largest investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information on the cryptocurrency industry. Current financial disclosures include:
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be legal, tax, investment, financial or other advice.