- Judge rules in favour of Coinbase in SEC battle.
- Coinbase wins motion to compel discovery.
- Key documents must be shared by SEC.
A federal judge ruled in favour of Coinbase in its ongoing legal battle with the US Securities and Exchange Commission, ordering the SEC to produce documents that could strengthen Coinbase’s defence.
Coinbase has argued that the SEC’s unclear regulatory stance has put the company and the crypto industry in a “Catch-22″ position that makes compliance almost impossible.
Southern District of New York Judge Katherine Failla granted Coinbase’s motion to compel discovery, including key documents related to how the SEC interprets the application of securities laws to digital assets. While some limitations were placed on the scope of the documents, Coinbase secured access to most of what it sought, including crucial information regarding the “Howey test,” which the SEC uses to determine if assets are securities.
Coinbase chief legal officer Paul Grewal hailed the ruling: “Judge Failla ruled from the bench on our motion to compel the SEC to provide key information for the defence of our case. In short, the Court ordered the SEC to produce important discovery.”
This ruling is a key part of Coinbase’s legal battle with the SEC, which sued the company in June 2023. The agency claims Coinbase operated as an unregistered securities exchange and failed to properly register its staking services.
The SEC’s aggressive approach has drawn criticism, with Coinbase arguing that its lack of clear rules is an attempt to stifle the crypto industry through heavy-handed litigation.
At stake is the future of the US cryptocurrency industry, with potentially far-reaching implications for both the regulatory environment and the way digital assets are traded and managed.
Should Coinbase prevail, it could mean increased clarity and stability for the industry. If the SEC succeeds, it may force widespread changes in the way crypto firms operate, with compliance becoming more costly and complex.
Shares of Coinbase stock (COIN) closed the week at a near seven-month low of $147.35.
