Coinbase CLO Paul Grewal strongly criticized the court ruling favoring the SEC in the lawsuit against Crowd Machine.
Amidst the ongoing legal dispute between Coinbase and the SEC, Coinbase CLO Paul Grewal criticized a recent court ruling in the SEC’s lawsuit against Crowd Machine. The dispute reignited the debate over whether tokens should be classified as securities.
Coinbase CLO Challenges SEC Ruling in Crowd Machine Lawsuit
Coinbase CLO Paul Grewal has opposed the recent court ruling favoring the SEC in the lawsuit against Crowd Machine Compute Tokens. Grewal raised questions about the renewed tokens and securities debate, quoting lawyer Bill Hughes and asking, “So the tokens themselves are once again the securities?”
He pointed out comments made in front of a Southern District of New York judge, questioning the accuracy of Coinbase’s filed comments in open court, given the recent SEC ruling while the SDNY decision is still pending.
Despite deeming the defendants as “fraudsters,” Grewal emphasized that having such defendants doesn’t justify false statements in federal court. He expressed concern that such misinformation could leave Americans confused about regulations, highlighting the challenge of understanding “what the SEC actually thinks the law is.”
SEC Case Outcome: Amended Final Judgment Against Crowd Machine
On January 17, 2024, the U.S. District Court in Northern California issued an amended final judgment against Crowd Machine, Metavine, and Founder Craig Sproule in response to an SEC case. The defendants were directed to pay $19.6 million plus $3.35 million in prejudgment interest for their involvement in an unregistered and fraudulent offering of Crowd Machine Compute Tokens (CMCTs).
The SEC’s complaint centered around allegations of materially false statements during the token sale. While the defendants agreed to permanent judgments restraining them from violating antifraud provisions and registration regulations, they did not admit guilt.
The ruling also imposed penalties, including a $195,000 fine for Craig Sproule, who additionally faces a ban on serving as an officer or director of a public company in the future. Despite questioning the decision, Coinbase CLO Paul Grewal clarified that he does not support the accused individuals in the case.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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