Just a month ago, a U.S. Supreme Court ruling on student debt cancellation impacted a very different sphere: that of cryptocurrency exchanges. Enter Coinbase, the crypto heavyweight who argues that this decision strengthens their fight against assertions of running an unregistered securities platform. On the other side of the field is the Securities and Exchange Commission (SEC), which is pressing charges against Coinbase. This lawsuit, according to Coinbase, signifies an attempt from the SEC to extend their control over the $1 trillion digital asset industry, infringing on the balance of powers.
In their opening legal defense, Coinbase alludes to a recent Supreme Court ruling. Just days after Coinbase presented their preliminary arguments, this ruling declared that the Secretary of Education had exceeded permissible bounds by eliminating approximately $430 billion in student debt. The ruling underscored a principle stating that when government agencies are making pivotal political or economic decisions, they should possess explicit legislative backing. Coinbase is now striving to link this ruling, known as Biden v Nebraska, to their situation.
In the view of Coinbase, the legal climate for cryptocurrencies remains muddled and legislators have yet to establish coherent rules for the sector. Defined as the absence of “clear congressional authorization,” Coinbase asserts the SEC does not possess the power it is attempting to assert. Simultaneously, Congress has acknowledged that regulatory authority is yet to be delegated, and discussions about regulatory bodies for digital asset industries are ongoing. One of the discussed measures is a renewed bipartisan bill, favouring the transfer of authority from the SEC to the Commodity Futures Trading Commission (CFTC).
In the meantime, the SEC is classifying certain digital assets, such as Solana (SOL), Cardano (ADA), and Polygon (MATIC) as regulated securities. Alongside Coinbase, the likes of Binance and Bittrex have encountered similar accusations of disregarding the law by not registering their activities. However, all three have refuted these allegations, asserting the SEC’s jurisdiction does not extend to their operations.
This case erupted earlier in June, and it remains to be seen how this legal tug-of-war unfolds in the coming years. Despite picking up a Supreme Court win recently, Coinbase’s struggles with regulatory authorities are far from over, a clear reflection of the larger regulatory ambiguity that entangles the crypto space.
Source: Coindesk
