A legal battle is underway between the SEC and Coinbase over whether the company violated securities laws. The outcome could set a crucial precedent for U.S. crypto regulation.
The SEC claims that many digital assets are securities and should be registered, while Coinbase argues that they don’t meet the criteria.
This case reflects broader debates about the applicability of decades-old securities laws to modern technologies like blockchain.
Judge Failla said, “I am concerned that what you’re asking for is too broad a definition of what constitutes a security.”
“I care about how the law develops in this case before me and I care what it means going forward,” she continued.
The outcome may impact the SEC’s ability to regulate the crypto industry.
Sen. Cynthia Lummis said, “The SEC’s attempt to shoehorn an entire new class of assets into the existing definition of a ‘security,’ and thereby add to the definition enumerated by Congress, exceeds the SEC’s authority, encroaches on Congress’s lawmaking, and contravenes the separation of powers.”
Additionally, the Supreme Court is considering a precedent that could limit federal agencies’ regulatory power, potentially affecting the SEC’s authority over crypto.
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