Coinbase’s Chief Legal Officer, Paul Grewal, has emphasized that cryptocurrencies are here to stay and has called on the Securities and Exchange Commission (SEC) to establish clear regulatory frameworks. The ongoing legal dispute between the SEC and Coinbase revolves around whether an investment contract requires specific contractual details.
These legal battles between the SEC and various crypto firms, including Coinbase Global and Ripple Labs, have provided hope for the web3 industry in the United States. Despite the approval of spot Bitcoin ETFs earlier this year, regulators, led by Senator Cynthia Lummis, are urging the Senate Banking Committee to implement comprehensive crypto regulatory frameworks before the upcoming elections.
As previously reported by Crypto News Flash, China, through Hong Kong, has now approved spot Bitcoin and Ether ETFs, allowing local investors to diversify their portfolios. The demand for digital assets has increased due to escalating global conflicts, particularly in the Middle East.
In June of last year, the SEC charged Coinbase Global with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency. Additionally, the SEC accused Coinbase Global of failing to register its crypto staking-as-a-service program, which put many altcoins at risk.
Coinbase’s legal team, led by Paul Grewal, has argued that the SEC has consistently exceeded its authority and has not provided clear regulatory guidelines for the crypto industry. On April 12, 2024, Coinbase’s legal team filed a memorandum of law supporting the company’s motion to certify the interlocutory appeal.
Coinbase’s attorneys believe that the court should dismiss the case due to lack of merit, particularly regarding the Howey test. According to Grewal, Coinbase Global believes that investment contracts must have some contractual element, a view that the SEC disagrees with. Furthermore, crypto exchanges involve willing buyers and sellers without any binding contracts, apart from smart contracts.
If the court agrees with Coinbase’s argument that an investment contract requires something contractual, it could have an impact on the ongoing SEC vs Ripple case. The SEC intends to ask the presiding judge to fine Ripple $2 billion in a potential settlement, but Ripple’s executives, including CEO Brad Garlinghouse, have vowed to fight against the agency. Additionally, Judge Analisa Torres has ruled that XRP sales on crypto exchanges do not qualify as investment contracts.
The cryptocurrency market recently experienced its first major correction in the 2024 bull cycle, just days before the highly anticipated Bitcoin halving. Despite governments’ attempts to control the industry through fragmented regulatory frameworks, the demand for digital assets remains strong.
According to the latest market data, the total crypto market cap increased by over 4 percent in the past 24 hours, reaching around $2.53 trillion on Monday. The price of Bitcoin rebounded by over 3.5 percent, trading slightly above $66,273.
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