Crucial Deadlines Set in Crypto Exchange Coinbase’s Fight Against SEC Allegations

News | July 24, 2023 By:

The legal battle between Coinbase Global Inc, a prominent crypto exchange, and the U.S. Securities and Exchange Commission (SEC) has entered a crucial phase, with NY Judge Katherine Polk Failla issuing a scheduling order that outlines the key deadlines for submissions. Paul Grewal, Coinbase’s Chief Legal Officer, emphasized the importance of these deadlines in shaping the direction and ultimate outcome of the lawsuit.

The first major deadline approaching is August 4, 2023, by which Coinbase must submit its comprehensive legal briefs. These filings will reveal the exchange’s line of defense, providing crucial insights into the evidence and arguments they plan to present in court. This pivotal moment will not only set the tone for Coinbase’s strategy but also serve as a glimpse into how they intend to counter the SEC’s allegations.

Subsequently, on or before August 11, 2023, interested parties supporting Coinbase’s motion for judgment on the pleadings can submit Amicus curiae briefs, limited to 20 pages. These submissions from stakeholders who share Coinbase’s perspective will add additional weight to the exchange’s case.

On the other side of the legal spectrum, the SEC, as the plaintiff, will present its legal brief, outlining its arguments and evidence by October 3, 2023. The commission aims to demonstrate that Coinbase has been operating as an unregistered broker since 2019, exposing investors to potential risks without the necessary regulatory oversight.

In response to the SEC’s brief, interested parties supporting the regulatory body’s stance can submit their amicus briefs by October 10, 2023, presenting their views on the matter and strengthening the SEC’s position.

Coinbase will have a final opportunity to refute the SEC’s allegations when they submit a reply brief on or before October 24, 2023. In this 15-page document, the exchange can directly address the SEC’s arguments and evidence, aiming to dismantle the regulatory agency’s case against them.

At the heart of the SEC’s lawsuit lies the accusation that Coinbase has been offering unregistered securities through its platform, effectively operating as an unregistered broker. The commission contends that Coinbase’s activities closely resemble those of registered broker-dealers but without obtaining the necessary regulatory authorization.

The SEC’s primary concern is investor protection, highlighting that without proper registration, investors may be left vulnerable to potential risks associated with unregulated broker-dealer practices. The outcome of this legal battle will not only impact Coinbase but also set a significant precedent for how cryptocurrency exchanges operate within the regulatory framework in the United States.