Coinbase Plans to File Motion Challenging SEC Lawsuit

<p>Coinbase plans to file a petition seeking the dismissal
of a lawsuit brought by the Securities and Exchange Commission (SEC). The
cryptocurrency exchange is planning to argue in court that it did not list securities on its
platform and that the SEC has no jurisdiction over crypto exchanges.</p><p>The Chief Legal Officer
of Coinbase, Paul Grewal, made the announcement yesterday (Thursday) during the
exchange's earnings call. Grewal expressed optimism that Coinbase was
likely to win the case against the regulator.</p><p>Coinbase Takes On SEC</p><p>The <a href="https://www.financemagnates.com/cryptocurrency/after-binance-sec-sues-coinbase-over-illegal-operation-of-crypto-exchange/" target="_blank" rel="follow">SEC
sued</a> Coinbase in June
for allegedly operating its crypto asset trading platform illegally and
offering unregistered securities. Additionally, the regulator claims that
Coinbase comingled and illegally offered the services of exchange,
broker-dealer, and clearinghouse, which according to the law governing
securities, ought to have been separated.</p><p>Coinbase maintains that
there is no regulatory clarity for the digital asset sector and that the
regulators seem to have conflicting stances on digital assets. The <a href="https://www.financemagnates.com/terms/e/exchange/">exchange</a> cited statements issued by the SEC and the CFTC regarding whether Ether is a commodity or a security. </p><p>In March, CFTC's
Chairman, Rostin Behnam, reiterated that Ether is a commodity, while the SEC maintains that all
cryptocurrencies except Bitcoin are securities. However, in a
longstanding legal battle between the SEC and <a href="https://www.financemagnates.com/terms/r/ripple/">Ripple</a>, a judge in New York
issued a landmark judgement that cryptocurrency XRP was <a href="https://www.financemagnates.com/cryptocurrency/ripples-win-over-sec-will-shape-us-crypto-regulation-industry-reacts/%5D" target="_blank" rel="follow">not
considered a security</a> when
sold to retail investors.</p><p>"Still, despite our
good faith efforts and transparency of our business to the <a href="https://www.financemagnates.com/terms/s/securities-and-exchange-commission-sec/" target="_blank" rel="follow">SEC</a> for years now, we were deeply disappointed
that the SEC brought an unwarranted enforcement action against us in June, and that
ten states initiated proceedings about our staking services," Coinbase
said.</p><p>Coinbase Q2 Earnings</p><p>Coinbase reported a 10%
quarter-over-quarter decline in revenue to USD $662 million. Besides that, the exchange
reported a 13% quarter-over-quarter decline in transaction revenue due to a
drop in trading volumes. Similarly, Coinbase's revenue from the
consumer segment declined 12% quarter-over-quarter.</p><p>On August 1, a federal judge in Manhattan opined that cryptocurrencies could be considered
securities regardless of the context in which they are marketed. The opinion seems to contradict an earlier statement issued in the same jurisdiction involving the case between the SEC and Ripple, which stated the opposite.</p>

This article was written by Jared Kirui at www.financemagnates.com.