The outcome of the landmark case will have broad implications for the crypto industry.<\/p>\n
Today\u2019s hearing on the SEC’s landmark case against Coinbase led many in the crypto community to believe that the company, and by extension, the digital asset industry, has the upper hand.<\/p>\n
Coinbase was looking for the court to dismiss the SEC\u2019s suit<\/a>, which alleged that the company was operating an unregistered exchange, brokerage and clearing house. The suit also accused Coinbase of failing to register its staking-as-a-service product.<\/p>\n Judge Katherine Polk Failla, who threw out<\/a> a class action lawsuit against the Uniswap team in August, has yet to decide on whether to dismiss some or all of the SEC\u2019s case. Orlando Cosme<\/a>, a lawyer advising many projects in the crypto space, told The Defiant that he anticipates that ruling to come in between the next month to four months.<\/p>\n \u201cMy top level take is that Judge Failla exposed that the emperor (Chair Gensler) has no clothes,\u201d Cosme told The Defiant. \u201cHer obvious conclusion, as is the conclusion of any lawyer who has dealt with crypto and securities laws seriously \u2014and contrary to Chair Gensler and the SEC’s message\u2014 is that the securities laws absolutely are not clear as applied to crypto.\u201d<\/p>\n <\/p>\n The SEC\u2019s suit against Coinbase stands to be potentially the most influential case in crypto\u2019s history \u2014 Coinbase is the largest public crypto company in the U.S., and the SEC\u2019s allegations cut to the heart of what constitutes a security, a key question which stands to impact every project that issues digital assets.<\/p>\n Markets soared<\/a> last year when the SEC lost major parts of a case against Ripple Labs Inc. when Judge Analisa Torres ruled that the XRP token is not inherently an investment contract and, therefore, not necessarily a security.<\/p>\n The outcome of the Coinbase case is likely to cause even more dramatic market swings as well as long-term recalibrations in the industry.<\/p>\n The SEC specifically named digital assets like SOL, MATIC, and ADA as securities. The named tokens command well over $60B in market capitalization.<\/p>\n While some in DeFi were ready to break out the champagne for an imminent Coinbase win, Cosme urges caution, saying that judges sometimes appear to side with one party during oral arguments only to rule differently after the fact.<\/p>\n A spokesperson from the DeFi Education Fund (DEF), a DeFi-focused research and advocacy group, told The Defiant the hearing was \u201ca step forward.\u201d<\/p>\n <\/p>\nA Step Forward<\/h2>\n
\n