Coinbase’s legal team argued in a recent legal filing that a recent US Supreme Court ruling on canceling student debt supports their fight against SECOND charges for operating an unregistered value center.
The Securities and Exchange Commission (SEC) filed a lawsuit on June 6, accusing Coinbase of violating federal securities law.
However, Coinbase maintains that the lawsuit is an attempt by the SEC to exercise excessive control over the digital asset industry.
Coinbase highlighted the importance of a recent Supreme Court decision about canceling student debt shortly after the exchange filed its initial defense.
He decisionBiden vs. Nebraska, concluded that the Secretary of Education exceeded his authority by canceling approximately $430 billion in student debt.
This decision emphasized the legal doctrine that government agencies must have the explicit support of Congress when making decisions of significant economic or political importance.
Coinbase argues that the implications of this ruling extend to its case, as lawmakers have yet to establish clear regulatory frameworks for the cryptocurrency industry.
The exchange claims that the SEC lawsuit represents an attempt to exert excessive control over digital assets without necessary guidance from Congress.
Coinbase Challenges SEC Regulatory Authority in Legal Filing
coin basein its legal presentationargues that the SEC lacks the “clear authorization from Congress” needed to exercise regulatory control over digital assets.
The company points to ongoing congressional deliberations on regulatory frameworks for the digital asset industry, including a bipartisan bill that favors the Commodity Futures Trading Commission (CFTC) over the SEC.
The SEC maintains that digital assets such as Solana (SOL), Cardano (ADA) and Polygon (MATIC) should be classified as regulated securities and accuses Coinbase of knowingly operating without proper registration.
Similar accusations have been made against Binance and Bittrex, who deny the charges and challenge the jurisdiction of the SEC.
A preliminary hearing was scheduled for yesterday in a New York court, marking the start of what could be a lengthy trial.
Separately, Coinbase recently won in the Supreme Court, with the judges ruling that a user’s lawsuit against the exchange could only proceed after an appeal.
Coinbase Asserts Additional Defenses Against SEC, Urges Prompt Consideration
Coinbase raises additional defenses, including abuse of discretion, equitable estoppel, dirty hands, and laches, stemming from the SEC’s alleged regulatory overreach, sudden policy reversals without notice, and the resulting harm to Coinbase and its shareholders.
The company argues that these defenses are based on the same factual basis as its fair notice defense, which the SEC does not seek to eliminate.
The legal battle between Coinbase and the SEC is of immense importance to the cryptocurrency industry as a whole. Beyond determining the fate of Coinbase, the outcome of this lawsuit could have a lasting impact on the regulatory landscape surrounding digital assets in the United States.
With lawmakers currently deliberating various digital asset laws, including one that favors the CFTC over the SEC, there is growing anticipation for more transparent and comprehensive regulatory frameworks.
