Coinbase questions the validity of the SEC’s default judgment in its former product manager’s insider trading case

Coinbase is fighting back as the U.S. Securities and Exchange Commission attempts to use a ruling in an insider trading case to bolster the agency's lawsuit against Coinbase. In a notice filed Tuesday, Coinbase said the default judgment should not have effect. A U.S. judge issued a default judgment last week in the insider trading case of a former Coinbase product manager, stating that trading certain crypto assets on the secondary market constitutes securities trading. Coinbase said the default judgment should not be considered of any significance, according to Tuesday’s filing. Coinbase also claimed that the SEC’s motion for default judgment did not mention the Ripple case and did not include “an analysis of secondary market transactions.” (The Block) Previously, in the insider trading case of the brother of a former Coinbase product manager, a U.S. court ruled that trading specific crypto assets on Coinbase was a securities transaction, while the encryption industry and Coinbase have always argued that cryptocurrencies are not securities and do not fall within the jurisdiction of the U.S. SEC. This is also not the first time a U.S. court has ruled on whether sales of certain cryptocurrencies are unregistered securities, regardless of whether they occur on a secondary platform such as an exchange.