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Gov case against Biance and Coinbase losing strength, good news for crypto investors
As the dust settles from the first battle between the Securities and Exchange Commission (SEC), Binance and Coinbase, it appears they have run out of high-quality legal arguments.
In June, the U.S. regulator sued the two companies, alleging that they were operating as unregistered securities exchanges and facilitating cryptocurrency trading. Digital assets — except bitcoin and possibly ether — are considered securities by the agency, along with exchanges on which they trade — and are subject to its oversight.
Binance and Coinbase have a different view, backed by their attorneys. The underlying question is whether cryptocurrencies are intended to yield returns from the labor of others. If this isn’t true, the government’s civil claims against them could be weakened or even fail to apply to some of the 19 tokens listed in the initial charges.
As a result, the SEC has used its own interpretations to police the industry, an action that can be seen as upstaging Congress’ legislative role.
