The recent ruling by the U.S. District Court for the Southern District of New York has rejected the SEC’s claim that Coinbase Wallet is an unregistered broker. Judge Katherine Polk Failla also denied the application to close the staking program of Coinbase crypto exchange.

The court ruled that Coinbase Inc. is engaged in the sale and offer of securities under U.S. law, contrary to the SEC’s allegations. The judge emphasized that Coinbase operates as an exchange, broker, and clearing agency under federal securities laws. The staking program offered by Coinbase was considered an unregistered offer and sale of securities.

In a lawsuit filed on June 6, 2023, the SEC accused Coinbase of operating as an unregistered broker and combining the functions of broker, exchange, and clearing agency, which are typically separate in traditional markets. The regulator also raised concerns about the Coinbase Earn staking program.

The SEC’s claims included that the lack of registration deprived Coinbase customers of essential protections such as regulatory reviews, record-keeping requirements, and conflict-of-interest prevention.

This ruling marks a significant development in the legal battle between Coinbase and the SEC, highlighting the complexities of regulatory oversight in the cryptocurrency industry.

Post Views: 4