Court seeks SEC clarification on defendants’ non-security token trading
Binance and Coinbase, the two largest crypto exchanges globally, are currently embroiled in legal issues with the SEC over alleged violations of operational regulations. The Coinbase Legal Chief highlighted the SEC’s perplexing approach to token categorization in the ongoing Binance case, adding to the complexity of the legal battle between the exchanges and the regulatory body.
SEC Declines to Take a Position:
Coinbase’s Chief Legal Officer, Paul Grewal, identified a perplexing legal strategy employed by the US SEC while reviewing a transcript of Binance’s hearing before Judge Jackson. Grewal observed and highlighted the regulatory body’s puzzling approach to the case, adding to the intrigue surrounding the legal proceedings.
The court inquired with the SEC during the transcription regarding the defendants’ trading of tokens that are not classified as securities. This raises questions about the classification of the remaining tokens and whether they are considered securities or not, further adding to the uncertainty surrounding the case.
During the questioning, the SEC Counsel evaded the question by stating that they are reserving their right, as they are currently in the pleading stage of the case. They emphasized the need to proceed to the discovery phase, where a comprehensive evaluation can be conducted to determine the categorization of the tokens in question.
During the proceedings, the court raised questions about tokens not specifically mentioned in the lawsuit, inquiring about their categorization and whether they fall under the commodities category. The SEC responded by stating that they are not taking a position on those tokens and attempted to move past the topic, emphasizing the need for more details under Rule 8. The commission also provided notice to the court and involved parties, highlighting that 14 tokens, including BNB, are subject to dispute.
Watchdog Seeking Exemption
Coinbase Legal Chief questions SEC’s use of Rule 8 to withhold information and motion to dismiss, deeming it potentially unlawful.
Attorney John Deaton suggests that the SEC’s argument implies reserving the right to classify anything as a security in the future, according to XRP Holders’ lawyer.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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