SEC Reveals Court Documents: Coinbase Had Full Awareness of Potential Violation of Securities Laws

New Court Documents Reveal: SEC Accuses Coinbase of Willfully Violating Securities Laws, Aiming for Business Growth

In a recent court filing, new evidence has emerged shedding light on the U.S. Securities and Exchange Commission’s (SEC) belief that Coinbase, the prominent crypto exchange, was well aware of potential violations of securities laws even before the regulator filed its lawsuit against them.

According to the SEC’s claims in the filing, Coinbase, despite being cognizant of engaging in illicit activities, consciously made the decision to continue its operations, viewing it as a strategic move to expand its business.

Interestingly, Coinbase actively discouraged crypto asset issuers from employing “problematic statements” in their marketing materials that could be interpreted as securities-related. This demonstrates their understanding of the association between such statements and securities, further emphasizing their awareness of potential legal concerns.

Moreover, since Coinbase went public, they repeatedly informed their shareholders about the inherent risk of crypto assets traded on their platform potentially being classified as securities. They even acknowledged the possibility of their own conduct violating federal securities laws, which is noteworthy given their reference to their registration statement as proof of the SEC’s approval of their actions.

These series of actions unequivocally indicate that Coinbase comprehended the applicability of securities laws to their operations. They were well-versed in the rules governing the legality of their conduct, yet deliberately chose to assume the associated risks in their pursuit of business growth.

The SEC’s initial lawsuit against Coinbase, filed last month, alleged the sale of unregistered securities, specifically naming cryptocurrencies like Cardano (ADA), Solana (SOL), and Polygon (MATIC).

In response, Coinbase filed a motion to dismiss the case in late June, asserting that the SEC lacked jurisdiction over the matter.

Read Also: Trader Who Captured 2023 Crypto Rally Issues Warning About 'Explosive' and High-Risk Bitcoin Developments

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

Comments are closed.