Coinbase is fighting back against the SEC, claiming that the digital assets listed on its platform are not securities.
The SEC sued Coinbase in June, alleging that the cryptocurrencies it offers are unregistered securities. Coinbase responded on Thursday, arguing that the cryptos are not investment contracts and therefore are not securities.
Coinbase has argued in the past that cryptocurrencies are not securities, and its latest filing goes into further detail explaining its position.
The exchange claims that the financial regulator approved its IPO in April 2021 without requiring it to register its operations or classify any of its listed assets as securities.
Coinbase pointed to SEC Chairman Gary Gensler’s testimony before Congress in May 2021, in which he allegedly acknowledged that the Commission lacks the statutory authority to regulate businesses that offer cryptocurrency trading services.
Coinbase highlighted that Gensler specifically said that only Congress has the authority to address the regulatory gaps in the operation of cryptocurrency exchanges, according to their interpretation of his testimony.
Coinbase alleged that the SEC changed its mind on the regulation of cryptocurrencies without any warning or explanation, leaving market participants confused and uncertain.
Coinbase has maintained that it does not list securities and that its staking service does not constitute a securities product.
Coinbase revealed that it had listed six of the 12 crypto assets that the SEC now considers securities before its 2021 IPO and that the SEC did not classify these assets as securities at the time.
Coinbase is seeking a judgment from the court that the SEC’s charges should be dismissed with prejudice and that Coinbase has prevailed on all claims.