The SEC’s claim that Coinbase Wallet is an unregistered broker has been rejected.
The U.S. District Court for the Southern District of New York <a href="https://storage.courtlistener.com/recap/gov.uscourts.nysd.599908/gov.uscourts.nysd.599908.105.0.pdf" target="_blank" rel="noopener noreferrer nofollow">rejected</a> the SEC’s claim that Coinbase Wallet is an unregistered broker. In addition, Judge Katherine Polk Failla denied the application to close the staking program of the <a href="https://crypto.news/tag/coinbase/" target="_blank" rel="noopener noreferrer nofollow">Coinbase</a> crypto exchange.
The judge ruled that Coinbase Inc. engaged in a sale and offer of securities under U.S. law. The SEC previously filed a lawsuit against the company, alleging the opposite. The judge also said that under federal securities laws, Coinbase operates as an exchange, broker, and clearing agency. Through its <a href="https://crypto.news/tag/staking/" target="_blank" rel="noopener noreferrer nofollow">staking</a> program, it engages in the unregistered offer and sale of securities.
You might also like: <a href="https://crypto.news/us-sec-asks-us-judge-to-reject-coinbases-dismissal-motion/" rel="noopener noreferrer nofollow"> SEC asks US judge to reject Coinbase’s dismissal motion </a>
The decision partially granted Coinbase’s motion to dismiss the SEC’s lawsuit alleging the company violated its rules.
<blockquote class="wp-block-quote">
 “However, the Court agrees with Defendants that they are entitled to dismissal of the claim that Coinbase acts as an unregistered broker by making its Wallet application available to customers.” <cite>Court filing</cite>
</blockquote>
On June 6, 2023, the SEC <a href="https://crypto.news/sec-sues-coinbase-just-hours-after-binance/" target="_blank" rel="noopener noreferrer nofollow">filed</a> a lawsuit against Coinbase. According to the regulator, the platform <a href="https://crypto.news/sec-vs-coinbase-and-new-lawsuit-history-of-the-years-long-battle/" target="_blank" rel="noopener noreferrer nofollow">operated</a> as an unregistered broker. The SEC said Coinbase illegally combines three functions, broker, exchange, and clearing agency, which are typically separated in traditional markets. The regulator also targeted the Coinbase Earn staking program.
The SEC also claimed that the lack of registration deprived Coinbase customers of essential protections, including regulatory reviews, record-keeping requirements, and conflict-of-interest prevention.
You might also like: <a href="https://crypto.news/analyst-coinbase-poised-to-win-dismissal-over-sec-lawsuit/" rel="noopener noreferrer nofollow"> Analyst: Coinbase poised to win dismissal over SEC lawsuit </a>

Court rejects SEC claim that Coinbase Wallet is unregistered broker

crypto.news

Other articles published on Mar 27, 2024

Next To Surge - Best Crypto to Watch

KuCoin Witnesses $1B In Withdrawals As Exchange Is Accused Of Money Laundering: 'SEC Trying To Pr...

Brainedge: Revolutionizing Global Education with AI-Powered Language Translation and Cryptocurren...

Analysts List Top 3 Memecoins Ready to Moonshot in 2024: BOME, PEPE, and ALGT Take Spotlight

Coinbase Diversifies Ethereum Validators: Strengthens Blockchain Resilience

XRP Eyes ETF Approval While Ethereum Faces SEC Hurdles

Join our free newsletter for daily crypto updates!