{"id":61300,"date":"2023-10-11T03:07:56","date_gmt":"2023-10-11T07:07:56","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=61300"},"modified":"2023-10-11T03:09:10","modified_gmt":"2023-10-11T07:09:10","slug":"securities-authorities-object-crypto-handling-in-coinbases-case","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/securities-authorities-object-crypto-handling-in-coinbases-case\/","title":{"rendered":"Securities Authorities Object Crypto Handling in Coinbase’s Case"},"content":{"rendered":"\n

A group representing North America's state securities authorities took aim at Coinbase's arguments in its defense against the SEC.<\/p>\n\n\n\n

\"Securities<\/figure>\n\n\n\n

An association of North American securities regulators argues that digital assets should not be viewed as “somehow special,” nor should actions against Coinbase be considered “novel or extraordinary.”<\/p>\n\n\n\n

In a brief filed\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a> on 10 October in the United States District Court for the Southern District of New York supporting the U.S. Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA) argued that digital assets require no special treatment when applying securities laws.<\/p>\n\n\n\n

\n

TradFi grey hairs file Amicus Curiae on behalf *drum roll* \ud83e\udd41 the SEC, in SEC vs. Coinbasehttps:\/\/t.co\/ukeHcfcX8B<\/use><\/svg><\/span><\/a>

NASAA landing page screenshot and story attached. PROTECT. pic.twitter.com\/DczmmRVlm5<\/use><\/svg><\/span><\/a><\/p>— Mikko Ohtamaa (@moo9000) October 10, 2023<\/use><\/svg><\/span><\/a><\/blockquote>

In June, the SEC filed a lawsuit against Coinbase for allegedly violating federal securities laws.<\/p>\n\n\n\n

Coinbase responded that its digital assets and services did not constitute as securities and that the SEC was overreaching<\/a>.<\/p>\n\n\n\n

Vincente Martinez, NASAA general counsel, however, argued that the SEC's position is neither “novel nor extraordinary.”<\/p>\n\n\n\n

\n

\u201cThe SEC\u2019s theory in this case is consistent with the agency\u2019s longstanding public position […] It is also well within the bounds of established law.\u201d<\/p>\n<\/blockquote>\n\n\n\n

The agency argued that explicit congressional authorization is irrelevant for the SEC to apply established law to digital assets.<\/p>\n\n\n\n

Howey Test Adequate<\/h2>\n\n\n\n

The judge's interpretation of the Howey test \u2014 which determines what constitutes an investment contract \u2014 is anticipated to be a crucial element of the lawsuit. Coinbase has argued that digital assets do not meet all of the criteria.<\/p>\n\n\n\n

Martinez argued that the Howey test was intended to be adequately flexible to accommodate all technological advancements in the securities markets, including the sale and trading of securities on blockchains \u2014 similar to previous SEC arguments.<\/p>\n\n\n\n

\u201cThe Court should reject Coinbase\u2019s attempt to narrow and misapply the established legal framework in order to avoid being subject to the same regulatory obligations as all other participants in the Nation\u2019s securities markets,\u201d said Martinez, adding:<\/p>\n\n\n\n

\n

\u201cThe Court should decline to treat digital assets as somehow special.\u201d<\/p>\n<\/blockquote>\n\n\n\n

Overestimated Impact of Crypto<\/h2>\n\n\n\n

Martinez also criticized Coinbase's invocation of the “major questions doctrine,” which asserts that executive agencies such as the SEC require Congressional approval for matters of significant political or economic significance.<\/p>\n\n\n\n

\u201cCoinbase dubiously casts the \u2018digital asset industry\u2019 as \u2018a significant portion of the American economy,\u2019\u201d said Martinez.<\/p>\n\n\n\n

However, Martinez stated that digital assets cannot be deemed a significant component of the American economy because most digital assets have no practical economic use case or widespread adoption outside of speculation.<\/p>\n\n\n\n

\u201cWith very few exceptions, digital assets are not widely accepted to pay for goods or services, nor can they be used to satisfy obligations to the government such as fees or taxes,\u201d he wrote.<\/p>\n\n\n\n

\u201cAs a class of assets, digital assets are not economically useful,\u201d he said, adding:<\/p>\n\n\n\n

\n

\u201cCoinbase overstates both the size and significance of this \u2018industry,\u2019 particularly the portion that securities regulators oversee.\u201d<\/p>\n<\/blockquote>\n\n\n\n

NASAA joined the SEC in requesting that the judge deny Coinbase's motion to dismiss the SEC lawsuit<\/a>.<\/p>\n\n\n\n

\n

Under the leadership of NASAA President Claire McHenry, NASAA members are advocating for investor protection in an era of technological innovation. Learn more about our legislative and regulatory priorities in this changing landscape: https:\/\/t.co\/yNPvjGrUhC<\/use><\/svg><\/span><\/a> pic.twitter.com\/4Gs5XU0NDt<\/use><\/svg><\/span><\/a><\/p>— NASAA (@NASAA) October 10, 2023<\/use><\/svg><\/span><\/a><\/blockquote>

NASAA comprises 68 members, including securities regulators from all 50 U.S. states, Canada, Mexico, and several U.S. territories.<\/p>\n","protected":false},"excerpt":{"rendered":"

A group representing North America’s state securities authorities took aim at Coinbase’s arguments in its defense against the SEC. An association of North American securities regulators argues that digital assets should not be viewed as “somehow special,” nor should actions against Coinbase be considered “novel or extraordinary.” In a brief filed on 10 October in […]<\/p>\n","protected":false},"author":56,"featured_media":61303,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[710,150,1502,143],"class_list":["post-61300","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-business","tag-coinbase","tag-regulation","tag-sec"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/10\/coinbase-sec.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/61300","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=61300"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/61300\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/61303"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=61300"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=61300"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=61300"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}