- The judge in the SEC case against Coinbase has dismissed a class action suit against Uniswap.
- The ruling has experts feeling optimistic about Coinbase’s chances in its legal battle with the market regulator.
- The Coinbase case holds significant implications for the crypto industry in the U.S.
Aside from holding that Uniswap developers could not be held liable for how people used their platforms, Judge Katherine Failla’s opinions also stretched to applying securities laws to the crypto industry in general.
Specifically, the judge overseeing the SEC case against Coinbase stated that Bitcoin and Ethereum are commodities and that Congress and the courts were yet to decide on the classification of ERC-20 tokens. As such, she proclaimed she was unwilling to stretch securities laws to apply to the case, arguing that this should be the job of Congress.
These statements from Judge Failla have left experts speculating on the implications for Coinbase, which the SEC accused in June 2023 of failing to register as an exchange, broker, or clearing agency and supporting trading in unregistered securities, the exact charges brought against Uniswap. Does Coinbase now have a clear path to victory against the SEC?
Experts Weigh in on Implications for Coinbase
Several experts speculate that the Uniswap ruling brightens the outlook for Coinbase. Commenting on Judge Failla’s dismissal of the Uniswap class action suit, Hayden Law founder John Hayden opined that the order strengthened Coinbase’s major questions doctrine arguments.
Like Hayden, Deaton Law founder John E. Deaton contended that the crypto exchange’s chances of dismissing the SEC lawsuit had increased significantly following the Uniswap ruling.
“Normally, I would say there’s no chance or a 1 percent chance for success with a MTD. I have to read this decision, but my 20-25% may have just jumped to 35% with this decision,” Deaton asserted.
Also responding to the Uniswap ruling, MonkeDAO Attorney Ariel Givner asserted it was a win for Coinbase. “The SEC should start getting used to losing in court,” she added.
The SEC case against Coinbase remains one of the most closely watched legal battles in the crypto space due to its potential implications for the leading crypto business and the crypto industry in the U.S.
What is at Stake
An SEC victory in the case against Coinbase could make it all but impossible for the crypto exchange to operate in the U.S. The lawsuit targets multiple aspects of the exchange’s business and the crypto industry as a whole, including its asset trading platform, staking service, and wallet service.
In response to the SEC’s claims, Coinbase has raised the major questions doctrine in a motion to dismiss, arguing that existing laws are unclear regarding the classification and regulation of crypto assets. As such, the crypto exchange asserts that the court is required to cede deference to Congress.
The SEC’s response to Coinbase’s motion is expected no later than October 4.
On the Flipside
- The SEC has yet to respond to Coinbase’s motion to dismiss.
Why This Matters
The SEC case against Coinbase has significant implications for the crypto industry in the U.S. The ruling from Judge Failla in the Uniswap potentially gives insight into what market participants can expect in the regulatory battle.
Read this to learn more about the SEC case against Coinbase:
Binance intends to make a big splash in Japan. Find out more: