- The SEC case against Coinbase has taken a new turn.
- The regulator has recently reversed course in the closely watched legal battle.
- The decision follows a pre-trial conference in the case.
The United States Securities and Exchange Commission case against Coinbase has not lacked in intensity as, right off the bat, both parties have moved to dismantle the other’s case ahead of the trial.
For one, the SEC revealed its intent to strike out the bulk of Coinbase’s defense on July 7. However, the regulator now appears unwilling to proceed with this plan per a recent letter filed in the case.
SEC Decides Against Pursuing Motion to Strike
In a joint letter addressed to Judge Katherine Polk Failla on Thursday, July 20, the SEC asserted that it would be holding off on filing a motion to strike Coinbase’s defenses for now.
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"At this time, the SEC will not be filing a motion to strike any of Coinbase's affirmative defenses pursuant to Federal Rule of Civil Procedure 12(f)," SEC lawyers wrote.
While the regulator fails to explain its decision, it follows the pre-trial conference held on July 13, where Judge Failla expressed that she was not supporting a motion to strike.
"I really don't want a motion to strike. I am really not convinced that we need to do a motion to strike, and I am not sure it's going to save anybody any time, but you will be able to persuade me of the contrary or not later on in this proceeding," the judge opined at the time.
The recent filing in the case also included a proposed briefing schedule outlining agreed and disputed deadlines for upcoming filings.
Scheduling Disputes
In the joint letter, the SEC and Coinbase reveal that they cannot agree on when the regulator should file its opposition brief to Coinbase’s anticipated motions to dismiss.
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While the crypto exchange has suggested a 30-day window for the regulator to file the brief, the SEC maintains that it needs a 60-day window.
Despite this ongoing dispute, both parties agreed on August 4 for Coinbase’s opening brief, with seven days for the crypto exchange’s supporters to file amicus briefs. Similarly, SEC supporters would have seven days to file amicus briefs after the regulator files its opposition brief, and Coinbas would have 21 days to reply.
The SEC accuses Coinbase of operating an unregistered securities exchange, broker, and clearing agency in the lawsuit filed on June 6. On the other hand, Coinbase has refuted these claims arguing that its listed assets do not constitute unregistered securities.
On the Flipside
- Judge Failla has cautioned both parties against rushing the case as she plans to give precedence to criminal proceedings in the coming months.
- Coinbase Chief Executive Officer Brian Armstrong recently met with House Democrats over crypto regulations.
Why This Matters
While this is a minor victory in the case, it is still a positive development for Coinbase.
Read about Coinbase’s response to the SEC’s motion to strike:
Coinbase Rails Against SEC’s Delay Tactics Ahead of Hearing
A new U.S. Senate bill could place an informal ban on DeFi:
New U.S. Senate Bill Targets Bringing DeFi to Heel by Compliance
