Court Ruling
In a significant development, the court overseeing the Coinbase vs. SEC case has ruled against Coinbase on certain claims. The SEC argued that Coinbase operated as an exchange, broker, and clearing agency without proper registration. The court agreed, supporting the SEC’s claims.
Coinbase’s Parent Company
The court also found that Coinbase’s parent company, CGI, could be held liable as a control person under the Exchange Act. This means that CGI could be held responsible for Coinbase’s actions.
Staking Program
The court agreed with the SEC that Coinbase’s staking program constituted an investment contract under the Howey Test. This means that it should have been registered as a security under the Securities Act.
Wallet Application
However, the court dismissed the SEC’s claims regarding Coinbase’s Wallet application. The court found that the SEC’s allegations were insufficient to prove that Coinbase acted as an unregistered broker through Wallet.
Next Steps
Both parties are now required to submit a proposed case management plan by April 19, 2024.
Edward Snowden’s Comments
Former NSA contractor Edward Snowden commented on the potential implications of the outcome, stating that if the SEC continues to act in bad faith, they will face severe consequences in court.
