Coinbase Chief Legal Officer Paul Grewal said the exchange had anticipated that the Court would allow the US Securities and Exchange Commission (SEC) case against it to proceed.
Grewal made the statement in a March 27 post on social media platform X after Judge Katherine Polk Failla ruled that the Commission had “sufficiently pleaded” its case against the largest US-based crypto trading platform.
Following the news, Coinbase shares dropped by more than 3% to $260, according to Yahoo Finance data.
Coinbase is ‘prepared for this’
According to the March 27 court order, the Judge found that Coinbase operated as an exchange, a broker, and a clearing agency under federal securities laws. Additionally, the Judge ruled that Coinbase offered and sold unregistered securities through its staking program.
However, the Judge dismissed the SEC’s claim that Coinbase acted as an unregistered broker via its wallet application.
In response, Grewal said:
“The Court decided that our SEC case will move forward on most of the claims, but dismissed the claims against Coinbase Wallet. We were prepared for this, and we look forward to uncovering more about the SEC’s internal views and discussions on crypto regulation.”
The SEC sued Coinbase last year, alleging that the firm violated federal securities law by facilitating trading of at least 13 crypto securities tokens.
Notably, Coinbase and the SEC have an extensive history of legal battles, with the exchange recently filing legal actions against the financial regulator’s refusal to establish rules demonstrating its authority over the emerging industry.
‘Nothinburger’
Meanwhile, several crypto stakeholders have dismissed the significance of the new ruling in favor of the SEC, with one community member describing it as a “nothingburger.”
Fox Business journalist Eleanor Terret said:
“The bar was always low for the SEC to get its way here. Would have been very surprising if Failla hadn’t found at least one plausible argument in the handful they are alleging against Coinbase. Now Coinbase will have a chance to prove its case in court like Ripple.”
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