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October 3 - The SEC argues that Coinbase made a mistake by basing its defense on a recent judicial decision that acquitted cryptocurrency developer Ripple Labs Inc of the accusation of violating federal securities laws when marketing its XRP token. The Commission cites another subsequent decision in the Terraform Labs case that contradicts Coinbase's argument.
Analysis of the case suggests that the SEC is using the Terraform Labs case decision as a basis to challenge the favorable verdict for Ripple, a victory celebrated by the cryptocurrency industry.
The SEC initiated legal proceedings against Coinbase in June, accusing it of operating unlawfully as a national securities exchange, broker, and clearing agency without registering with the regulatory body.
In August, Coinbase requested a federal court in Manhattan to dismiss the case, arguing that the SEC lacked jurisdiction to pursue the action because the digital assets and services in question did not qualify as securities.
The SEC stated, "With the exception of the Wallet application, Coinbase does not dispute here that it performed the functions of a stock exchange, broker, and clearing agency. Therefore, the decision hinges on determining whether Coinbase intermediated transactions involving investment contracts, and thus securities. It did so," according to the petition. Coinbase has not issued immediate comments.