Since the start of its dispute with the SEC, Coinbase has always defended itself by opposing the regulator’s attacks. However, the case has just taken a new turn: Brian Armstrong’s company has just appealed to a Manhattan court judge to dismiss the charges made against it. Coinbase is denouncing the SEC’s abuse of power, claiming that it is conducting illegal operations against the cryptocurrency industry.
Coinbase seeks to dismiss SEC complaint
Recently, American exchange Coinbase filed a motion to invalidate the Securities and Exchange Commission (SEC) complaints made against it. In addition, the Web3 behemoth will shortly ask a judge to assess the relevance of the lawsuit brought by the regulator.
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As a reminder, on June 6, 2023, the institution dedicated to the US financial markets had taken Brian Armstrong’s company to court. The company was accused of failing to comply with applicable securities laws. by allowing trading in a dozen crypto-currencies considered to be securities. Its staking program was also strongly criticized by the regulator.
In its letter filed Wednesday evening in Manhattan federal court, Coinbase rejects SEC charges arguing that the cryptocurrencies available on its platform are not securities. At the same time, the company points out that there is too great a dissonance between the legislation in place and the interpretation made by the US regulator:
» Rather than test a new point of view by developing d’avis and commentary, the SEC chose to deploy its aggressive agenda through punitive retroactive enforcement actions. The agency’s enforcement power is significant but not unlimited. The SEC’s action here is beyond those limits and illegal. «
Cryptocurrency exchange denounces SEC abuse of powerwhich jeopardizes the competitiveness of the American market to the benefit of other regions of the world, such as Europe and Asia.
In its lengthy 177-page document, the American company claims to be in favor of regulating cryptocurrencies and their technologies. However, regulation must be clear and precise in order to limit « regulatory loopholes » that could lead to abusive interpretation of the law.
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SEC repercussions on Coinbase stock and the crypto market.
What impact will this case have on Coinbase’s share price? At $64 a share at the beginning of June, Coinbase’s price fell rapidly when the SEC initiated proceedings against Coinbase and its main rival Binance. In just two days, its share price plummeted by 22%.
However, its stock being correlated to the cryptocurrency market, the company has taken advantage of the recent rise in Bitcoin (BTC) to not only offset its losses, but also bounce back on an upward trend. Currently, its price stands at $72, its highest since March 2023.
Coinbase share price (COIN) over the last 6 months
On his side, the cryptocurrency market is marked by the record dominance of Bitcoin (BTC) unseen since the previous bullrun. Today, the king of cryptocurrencies accounts for over 50% of total market capitalization.
This dominance reflects growing interest in Bitcoin to the detriment of altcoins which, after a temporary surge, returned to near lows in the wake of the SEC lawsuits.
Consequently, while BTC has experienced 84% growth since January 2023, MATIC, BNB and ADA are recording -22.5%, -2.5% and +12% respectively.. The gloomy price of these cryptocurrencies is linked to the SEC affair: considering them as securities, their prices have fallen by 20% to 30% each.
Note that ETH distinguishes itself from altcoins by the ubiquity of the Ethereum ecosystem on the Web3 and the SEC’s current confusion over the regulations to be applied to it. As a result, Ether has not been impacted by these legal cases, and its share price has risen by 50% over the past 6 months.
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Published by Éditions Larousse
Sources : Reuters, TradingView
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A lifelong enthusiast for new technologies, I gradually became involved in Web3 activities in the year 2021. As time went by, I wanted to do my bit. That’s when I became a writer, with a view to explaining cryptocurrency-related topics to as many people as possible.
Timothy Bourbotte
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