Deepika- SEC’s lawsuit against Coinbase is unprecedented.
- NASAA stated in favor of the SEC, stating crypto shouldn’t be treated as special.
Recently, the North American Securities Administrators Association (NASAA) responded in favor of the SEC’s lawsuit against Coinbase. According to NASAA, crypto shouldn’t be treated as something special.
Let’s understand what’s exactly the case!
Crypto Isn’t Special, Says NASAA
The North American Securities Administrators Association (NASAA) made a statement that crypto isn’t special. The argument says crypto isn’t something special and should not be considered ‘somehow special.’ To be more specific, NASAA says it should not be regarded as something ‘novel or extraordinary.’
The United States District Court for the Southern District of New York mentioned the statement in a filing submitted in support of the U.S. Securities and Exchange Commission (SEC).
Lawsuit Against Coinbase
In June, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase for illegally operating as a National Securities Exchange and broker. The lawsuit was filed before midnight in Manhattan Federal Court.
According to the lawsuit, Coinbase has made billions by unlawfully facilitating the buying and selling of cryptocurrency. Further, the SEC mentioned that Coinbase is interrupting the traditional finance services of exchanges and brokers.
According to the complaint filed, Coinbase and CGI violated the Securities Exchange Act of 1934 and the Securities Act of 1933. Coinbase is not only charged for violating the rules but also for failing to register as a Staking-as-a-Service.
What Does Coinbase Has To Say?
After a series of statements and Coinbase’s attempt to dismiss the lawsuit, Coinbase is currently trying to protect itself.
As per a previous report, Coinbase tried to dismiss the lawsuit by saying “Cryptocurrency and the digital asset do not meet the SEC criteria and the SEC is overstepping”. This statement by Coinbase attempted to dismiss the entire case, but NASAA came forward in support of the SEC.
They argue that exchange bodies that are making billions through crypto exchange and broker services shouldn’t be regarded as special. At the same time, the court is evaluating both arguments.
As of now, the government relies on the Howey Test, an instrument used to determine what qualifies as an investment contract. Coinbase’s argument is based on the Howey Test, which states that Coinbase or any of its services do not meet the criteria.
In response, NASAA’s general council stated that the Howey Test is flexible enough to evaluate technological advancement in financial markets. All in all, NASAA tried to respond to the SEC’s lawsuit and emphasized the SEC’s argument.
Ultimately, Coinbase attempted to narrow down and dismiss the lawsuit. The court should not treat cryptocurrency as something special beyond the country’s rules and regulations.
Conclusion
The lawsuit against Coinbase is now entirely based on further arguments. Till now, NASAA and SEC have teamed up to continue the investigation. On the other hand, Coinbase is consistently trying to prove the SEC’s lawsuit as overstepping.
Currently, the latest statement claims it should not be treated as something special.
