Coinbase challenges the court: crypto are not securities, what could happen?

Coinbase faces a critical legal challenge, asking the Court of Appeals to establish that crypto operations are not considered securities. This decision could shape the regulatory future and set new standards for the entire industry.

Let’s see all the details in this article. 

The legal battle of Coinbase aims to redefine the regulatory landscape of crypto in the United States

Coinbase, one of the main cryptocurrency exchanges in the world, has filed an appeal to the Second Circuit Court of Appeals to establish a fundamental question: should crypto transactions be treated as securities?

This case represents a turning point for the entire cryptocurrency industry, addressing a central theme in the regulation of the sector.

The issue is of great relevance because the verdict could influence both the markets and future policies. 

Coinbase emphasized that the definition of crypto transactions has critical importance, not only for regulation but also for investor trust.

At the heart of the case, Coinbase presented a strong legal argument: the sellers and buyers of cryptocurrencies have no mutual obligations after the transaction.

The company argues that crypto operations differ radically from traditional securities, such as stocks or bonds, where investors obtain specific rights against the issuers.

The legal team of Coinbase stated that cryptocurrency transactions are limited to the buying and selling of digital assets, without any ongoing commitment between the parties. 

This point, according to Coinbase, is crucial to distinguish cryptocurrencies from securities regulated by the Securities and Exchange Commission (SEC).

Regulatory Clarity: An Urgent Necessity

The lack of clear guidelines is a problem that has plagued the cryptocurrency sector for years. Several judges have expressed contrasting opinions in previous cases, creating confusion among market participants. 

Coinbase has emphasized that, without defined rules, the sector will continue to be subject to different interpretations in different courts, causing regulatory uncertainty and volatility.

The company has requested that the Court provide a clear definition of the rules applicable to the trading of digital assets, thus helping to establish a uniform regulatory framework.

The controversy with the SEC, which began in June 2023, triggered strong reactions in the cryptocurrency market. The SEC had accused Coinbase of operating without the necessary registration, leading to waves of volatility that shook the entire crypto ecosystem.

According to Coinbase, recognizing that cryptocurrencies are not securities could reduce regulatory uncertainty and stabilize the market. The company argues that investors deserve consistent and transparent rules to operate with confidence.

The case of Coinbase represents a unique opportunity to address a fundamental issue for the cryptocurrency industry: how to regulate the secondary trading of digital assets. 

According to industry experts, this legal battle could become the starting point for establishing clearer and more uniform industry standards.

Coinbase stated that the case offers the opportunity to define rules that can guide a multibillion-dollar industry towards greater transparency and legitimacy. 

The company urged regulators to use this opportunity to create a regulatory framework that fosters innovation without compromising investor protection.

What to expect?

Although the decision of the Court of Appeals for the Second Circuit remains uncertain, the case of Coinbase is already having a significant impact on the public debate and the regulation of cryptocurrencies. 

A favorable ruling could establish an important legal precedent, influencing the way cryptocurrencies are treated not only in the United States, but also globally.

On the other hand, a contrary ruling could lead to greater regulatory pressure on the sector, forcing the exchanges to operate under stricter rules.

In any case, while the debate continues, it is clear that the outcome of this case will have far-reaching implications, not only for Coinbase, but for the entire crypto ecosystem.

Clear and uniform regulation could mark the beginning of a new era for cryptocurrencies, with greater transparency and opportunities for all the actors involved.