- SEC’s pursuit of the case has created uncertainty for Coinbase and others.
- Coinbase CLO shared that the platform has filed an amicus brief in SEC versus Wahi case.
Coinbase Chief Legal Officer Paul Grewal tweeted on March 14 that last week he testified to Congress about Coinbase’s inability to register with the SEC for offering digital asset securities. Today, an amicus brief was filed in SEC v. Wahi, explaining why the lawsuit is misguided and will only exacerbate the situation.
According to the brief, Coinbase, the largest cryptocurrency trading platform in the US, is being accused by the SEC of unlawfully listing securities on its platform. However, the exchange denies this allegation, stating that it does not list any securities on its platform.
The document further states that the SEC’s pursuit of this case, without providing clear guidance on the applicability of federal securities laws to digital assets, has created uncertainty for Coinbase and others. Coinbase has called for clear rules and guidance from the SEC through formal rulemaking requests, but the Commission has yet to respond. The enforcement action against Coinbase creates a need for industry-wide rules rather than narrow settlement orders.
Grewal mentions that Coinbase has expressed its desire to list securities on its platform, but the SEC has not responded to the company’s 50 questions presented in a petition for rulemaking submitted last year. Despite not currently listing securities, Coinbase is interested in doing so and is waiting for clarification from the SEC on how to proceed.
The legal officer continues that the Commission has been prioritizing actions that distort the legal definition of an investment contract rather than working on practical and lasting solutions like developing rules or registration options. Meanwhile, Grewal shared, “We appreciate the district court’s careful consideration of these issues.”
However, Grewal’s tweet highlights that Coinbase emphasizes the importance of the rule of law, which was recognized by the DOJ in the case of its former employee and his accomplices. The DOJ charged them with wire fraud, but not securities fraud, which aligns with the fact that the assets involved are not securities.