The judge has ruled that through its staking program, Coinbase has operated as an unregistered intermediary of securities.
A federal judge in Manhattan on Wednesday ruled the case between the U.S. Securities and Exchange Commission (SEC) and crypto exchange Coinbase can move forward.
According to the ruling by Judge Katherine Polk, Coinbase has operated as an unregistered intermediary of securities–thanks in large part to the “well-pleaded allegations” of the Complaint by the SEC.
“The Court finds that the SEC adequately alleges that Coinbase, through its staking program, engaged in the unregistered offer and sale of securities,” read the latest ruling.
The lawsuit was filed on June 6 by the SEC, which argued that the largest exchange in the country was violating the nation’s securities rules and regulations.
Coinbase Win
Coinbase did score a win today, however. Polk sided with the company in dismissing the claim that the company acts as an unregistered broker by offering its Coinbase Wallet.
Chief Legal Officer for Coinbase, Paul Grewal, posted on X today that the company was expecting the ruling, claiming early motions against government agencies are “almost always denied.”
Grewal also called out lawmakers in Congress, encouraging the body to build on the momentum from last year regarding digital asset legislation, especially “If we want innovation to remain in the U.S.”
The SEC has been on a tirade against the crypto industry, including court cases against Binance, and a number of tokens the agency called unregistered securities.
The Coinbase versus the SEC case will now face a jury, although no date has been set for when court proceedings will commence. Both parties have until April 19 to propose a case management plan, said the judge.
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