Judge: SEC's claims against Coinbase to move forward

Companies • March 27, 2024, 10:22AM EDT

Published 1 minute earlier on

Quick Take

Judge Failla said the SEC has “sufficiently pleaded” that Coinbase operated as an exchange, broker and a clearing agency, as well as engaged in the unregistered sale of securities through its staking program.
A claim regarding Coinbase’s Wallet application was dismissed.

Judge Katherine Polk Failla of New York ruled that a case involving the Securities and Exchange Commission and Coinbase is to proceed, denying the exchange's motion to dismiss the case.

Judge Failla said the SEC has "sufficiently pleaded" that Coinbase operated as an exchange, broker and clearing agency, and engaged in the unregistered sale of securities through its staking program. However, the judge did decide to dismiss the SEC's claim that Coinbase acted as an unregistered broker when it made its Wallet application available to its customers, according to an order filed on Wednesday.

Coinbase was sued by the SEC last year for allegedly operating as an unregistered exchange, broker and clearing agency. The regulator also took issue with Coinbase's staking and wallet services.

Coinbase has pushed back on the SEC's claims, arguing for the case to be dismissed and accusing the regulator of taking a "regulation by enforcement approach."

Next, the case proceeds to trial and will be presented to a jury, though the process wouldn't likely start until 2025.

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About Author

Sarah is a reporter at The Block covering policy, regulation and legal happenings. Before, Sarah was a reporter with CQ Legal writing about securities regulation, which is where she first started reporting on crypto. Sarah has also written for The Bond Buyer and American Banker, among other finance-related publications. She graduated from the University of Missouri and earned a degree in print and digital journalism. Sarah is based in Washington D.C., and is an avid coffee lover. You can follow her on Twitter @ForTheWynn.