Coinbase challenges SEC stance on cryptocurrency classification amid FTX's recovery plans
Investing.com | Editor Venkatesh Jartarkar
Published Oct 25, 2023 12:54PM ET
Coinbase (NASDAQ:COIN) is contesting the Securities and Exchange Commission's (SEC) classification of cryptocurrencies as securities, arguing that not all tokens are investment contracts. Paul Grewal, Coinbase's Chief Legal Officer, has criticized the SEC's stance as contradicting established legal norms and raising separation-of-powers concerns. Amid this standoff, XRP lawyer John Deaton has expressed support for Coinbase's Motion to Dismiss (MTD), anticipating Judge Failla will grant it due to the SEC's weak legal standing.
Deaton has also criticized Gary Gensler and the SEC's attempt to expand the Howey test, a standard used to determine whether certain transactions qualify as "investment contracts," as unconstitutional. This all comes amidst ongoing Ripple Vs SEC hearings, with Coinbase, also seeking clarity on cryptocurrency rules. Earlier this year, both Coinbase and Binance were sued by the SEC.
In parallel news, FTX, currently in bankruptcy, has transferred $10M in digital assets including Ethereum, Maker, Chainlink, and AAVE tokens to Coinbase and Binance. The move comes amidst a bullish trend in the crypto market. Kevin Cofsky has disclosed FTX's relaunch considerations with three entities under review for an independent operation, partnership or sale decision expected mid-December.
CEO John Ray's task force has been studying this relaunch since January. FTX has recently staked $150M in Ethereum and Solana and plans to migrate bridged tokens to native blockchains. The exchange proposes a strategy to return $9B in customer funds by 2024, aiming to unfreeze up to 90% of assets. The Arkham Intelligence platform provided the transfer data.
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