The United States Securities and Exchange Commission (SEC) is currently in a lawsuit with Ripple Lab regarding what it says are illegal sales of unregistered securities. It has also taken notice of crypto exchanges like Coinbase, noting that they have been making such sales to investors without registering them as securities.
In another case, Kraken, a popular crypto exchange, came under the commission’s radar concerning selling unregistered investment products. While the company insists that it has done nothing wrong, the SEC is adamant in its pursuit of justice.
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Coinbase Challenges U.S. SEC Statement
The chief legal officer at Coinbase, Paul Grewal, stated on March 21 that the company had sent a letter to the United States SEC. The exchange aims to know the SEC’s stance on cryptocurrency securities regulation.
Coinbase noted that core staking services are not securities but different software services it offers. According to Grewal, paying a fee to someone doesn’t make the transaction secure.
He further stated that the SEC’s declaration that staking-as-a-service is security doesn’t align with the company’s view and it’s seeking clarity on the matter.
Meanwhile, the crypto community is eagerly awaiting the outcome of Coinbase’s dispute with the SEC over its core staking services. If the SEC decides that staking is a security, it could have a major impact on the industry as a whole.
Previous Dispute Between Coinbase And SEC
The ongoing dispute between the SEC and the crypto exchange has been a long one. In a blog post responding to the SEC securities ruling, Coinbase stated that its Lend program is not an investment contract or security. The Lend program typically allows users to earn interest on certain assets held on the platform. Coinbase further stated that Lend is merely a product offered to eligible customers and is not a security because it involves no investment of money and no common enterprise.
The SEC had said that the Lend program is a security, but Coinbase disagrees. In its blog post, Coinbase outlined its reasons for why the Lend program is not a security. The program does not involve an investment of money, and there is no common enterprise between Coinbase and its users.