Coinbase Counters SEC Lawsuit, Argues Digital Assets Outside Regulator's Jurisdiction

In a significant legal development, Coinbase, a prominent cryptocurrency exchange, has responded to the lawsuit filed by the U.S. Securities and Exchange Commission (SEC). Coinbase asserts that the digital assets listed on its platform do not fall under the SEC's purview.

The lawsuit, initiated in early June, alleges that several cryptocurrencies offered through Coinbase's wallet or trading platforms are unregistered securities.

In its official response submitted on Thursday, Coinbase maintains that these cryptocurrencies are not investment contracts and, therefore, should not be classified as securities. While this argument aligns with Coinbase's previous public statements, the recent filing delves deeper into the company's rationale, highlighting that the cryptos on its secondary market platform do not involve arrangements where promoters sell assets tied to contracts.

Coinbase draws upon language from the Supreme Court's precedent-setting Howey case to bolster its position.