Coinbase plans to file a motion seeking the dismissal of SEC's lawsuit

By: Henry Felix

August 4, 2023 8:31 AM

Paul Grewal, Coinbase's general counsel, stated that the company would move to have the SEC's lawsuit against the cryptocurrency exchange dismissed on the grounds that Coinbase never sold securities.

Coinbase intends to file an order with the Securities and Exchange Commission (SEC) requesting the dismissal of the complaint on August 4, with the crypto exchange's legal chief stating that the company expects to win the case.

Coinbase's Chief Legal Officer Paul Grewal was certain the exchange would prevail in court when it faced off against the regulator in the second quarter of 2023 on the company's earnings call for that period, which was held on August 3.

"I want to be absolutely clear with regard to the legal dispute with the SEC. We believe we can win. We anticipate victory."

On June 6th, the SEC filed a lawsuit against the exchange, claiming it marketed unregistered securities and conducted business as an unlicensed securities exchange. Grewal stated that Coinbase will file a motion on August 4 asking the court to throw out the complaint.

"We will file an order dismissing the case in its entirety with the court tomorrow."

Grewal stated that it will claim that Coinbase did not list securities on its site, that the SEC has no regulatory power over crypto exchanges, and that when it deemed Coinbase's registration statement effective in April 2021, it never advised that Coinbase register.

He anticipates that the brief outlining the court's reasons will be fully submitted and assessed by the end of October.

Obtaining clarity regarding regulations is the aim of all of our interactions with the SEC and the U.S. government," not just the lawsuits, according to Grewal.

Related: Coinbase CEO claims SEC ordered delisting of all but Bitcoin: Report

"The reason we are so intent on pushing for clear regulation here in the United States is that we currently have very divergent ideas regarding what the law provides," Grewal explained.

He referenced the fact that Gary Gensler, head of the Securities and Exchange Commission, and Rostin Behnam, head of the Commodity Futures Trading Commission, have made contradictory remarks about the legal status of Ether (ETH).

Gensler has previously declared that all cryptocurrencies other than Bitcoin (BTC) are securities, but Behnam testified in March before the Senate that ETH was a commodity.

Grewal remarked that many of the regulations now in effect regarding the space "were established long before the internet had even existed."

"Clarity itself is the purpose, regardless of any specific decision made in relation to any motion or legal matter. That is how we define victory."