Coinbase Legal Setback: Court Rejects Motion To Dismiss SEC's Securities Allegations
Portfolio Pulse from Murtuza Merchant
A U.S. court has largely ruled against Coinbase Inc. (NASDAQ:COIN) in its motion to dismiss an SEC lawsuit alleging unregistered securities activity. The SEC's lawsuit, filed in June 2023, accuses Coinbase of operating as an unregistered securities dealer in its exchange functionality and staking program. While the court dismissed claims regarding Coinbase's wallet service, it agreed with the SEC that Coinbase's exchange and staking activities could constitute unregistered securities offerings. Coinbase's Chief Legal Officer, Paul Grewal, stated the company is prepared for this outcome and emphasized the need for comprehensive digital assets legislation in the U.S.
March 27, 2024 | 3:03 pm
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Coinbase Inc. faces a legal setback as a U.S. court rules against its motion to dismiss an SEC lawsuit alleging unregistered securities activity, except for claims regarding its wallet service.
The court's decision to rule against Coinbase on most aspects of its motion to dismiss the SEC's lawsuit suggests a significant legal challenge for the company. This could potentially impact investor confidence and the company's stock price in the short term. The dismissal of claims regarding the wallet service is a minor victory but does not offset the broader implications of the ruling on Coinbase's core operations. The ongoing legal battle and the call for comprehensive digital assets legislation in the U.S. highlight the regulatory uncertainties facing the cryptocurrency industry.
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