U.S. judge Friday to dismiss a suit by the Securities and Exchange Commission. They brought the arguments to back up their request.The SEC lawsuit filed June 6, alleges the crypto exchange is an unregistered securities broker and exchange. In“The SEC misreads Howey in asserting that a ‘scheme’ without a contractual undertaking will suffice.”“Recent crypto cases do not support the SEC’s efforts to use ‘scheme’ as an escape hatch from statutory text.
Then, the motion goes on to absolutely pulverize the SEC’s allegations with a simple analogy to baseball cards.To clearly illustrate what they mean, Coinbase’s lawyers make the following devastating critique of the Gensler SEC’s view of cryptocurrencies: “So for example: one can invest in a baseball or other trading card company, through an instrument that imposes obligations on the company, and that will be a security. Or one can buy baseball cards on the open market, hoping they appreciate in value, and one will have bought a commodity. That remains true even if the company makes representations about plans to create a premier card trading platform, to drive up the value of the cards it sells.
The attorneys for Coinbase continued later on in the motion to delineate crypto exchanges from the stock market: “There is an asset sale. That’s it. It is akin to the sale of a parcel of land, the value of which may fluctuate after the sale. Or a condo in a new development. Or an American Girl Doll, or a Beanie Baby, or a baseball card.”Coinbase’s argument here isn’t any shoe-horned in theorizing. It has a real basis in the historical development of the market for digital assets and tokens.