Coinbase, the American cryptocurrency exchange, has filed a motion to dismiss the lawsuit brought against it by the United States Securities and Exchange Commission (SEC).
In a legal document submitted to the U.S. District Court for the Southern District of New York, Coinbase questioned the SEC’s interpretation of securities laws and argued that the agency was overstepping its authority.
The motion to dismiss highlights Coinbase’s firm stance in challenging the SEC’s claims. It argues that even if the allegations in the lawsuit are true, the plaintiff lacks a valid legal basis for the claims. The SEC’s lawsuit accuses Coinbase of facilitating unregistered trading in 12 digital tokens that are considered securities.
Coinbase strongly disputes the SEC’s allegations and contends that the agency is applying securities laws in ways that deviate from established legal frameworks. Paul Grewal, Coinbase’s Chief Legal Officer, expressed this sentiment on Twitter, stating that the SEC’s claims “go far beyond existing law” and should be dismissed.
In Coinbase’s filed motion, they wrote:
“Even if the SEC were correct that the assets and services it identifies are within the scope of its existing regulatory authority, this [legal] action must be dismissed on independent grounds that it violates Coinbase’s due process rights and constitutes an extraordinary abuse of process.”
Furthermore, Coinbase’s legal team pointed out that the SEC had previously approved the company’s registration statement in 2021, allowing it to go public and sell shares to investors. This approval followed an extensive review process and discussions with the SEC, enabling Coinbase to offer trading of more than 240 tokens on its platform, including six of the 12 tokens currently in dispute.