One of America's largest cryptocurrency exchanges is scheduled to face the country's securities regulator in court today (Jan. 17). Coinbase will reportedly argue that the U.S. Securities and Exchange Commission (SEC) should abandon its case, as the tokens traded on the exchange are not the same as securities. The crypto community closely monitors this court battle.
Multiple reports suggest Coinbase plans to make the chief argument it has relied on in past filings, one used by other crypto companies: that the SEC is overstepping its authority and that the assets it lists for trading differ from regulated products like stocks and bonds.
Last year, in June, the SEC sued Coinbase, accusing the company of allowing the trading of 13 cryptocurrencies that should have been registered as securities, thus operating as an illegal securities exchange.
One point of contention is Coinbase's "staking" program, where the platform pools assets to verify activity on blockchain networks and rewards customers. The SEC claims that Coinbase should have registered this program with the agency.
It is also noteworthy that reports suggest Coinbase is not alone in challenging the SEC's stance. Other cryptocurrency firms share similar views, collectively arguing that most tokens do not meet the definition of a security and that legislation is necessary to regulate the industry.
