The lawsuit filed by securities regulators against Coinbase, the largest virtual asset exchange in the United States, alleging violations of securities laws and investor protection duties, continues to proceed.
On the 27th (local time), according to the Wall Street Journal (WSJ) and others, Judge Katherine Failla of the U.S. District Court for the Southern District of New York rejected Coinbase's request to dismiss the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Coinbase. With this court decision, the Coinbase case brought by the SEC is expected to move into the discovery phase.
In June of last year, the SEC filed a lawsuit in federal court claiming that Coinbase engaged in securities brokerage activities without registration and evaded disclosure obligations for investor protection, among other illegal acts. According to the SEC, at least 13 virtual assets traded on Coinbase qualify as securities subject to securities laws. Additionally, the SEC alleged that Coinbase provided 'staking' services without registration. Cryptocurrency staking refers to a service where users deposit cryptocurrencies and receive interest, similar to a bank deposit.
However, Judge Failla accepted Coinbase's request to dismiss the SEC's claim that Coinbase acted as an unregistered broker through its cryptocurrency wallet services.
The court has been examining whether the SEC holds supervisory authority related to this lawsuit. Paul Grewal, Coinbase's Chief Legal Officer (CLO), stated, "We hope more will be revealed about the SEC's internal views and discussions regarding virtual asset regulation."
On the day, Coinbase's stock closed down about 4% compared to the previous session.
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