As part of a preliminary hearing in the case between Coinbase and the SEC, one of the latter’s lawyers suggested that the American financial policeman had not fully analyzed whether the exchange’s activities could violate laws on securities prior to its IPO. We return to these comments in more detail.
The SEC justifies itself on the IPO of Coinbase
This week, lawyers for the Securities and Exchange Commission (SEC) and Coinbase were heard by Judge Katherine Polk Failla of the Court for the Southern District of New Yorkas part of a preliminary hearing.
One of the notable facts to emerge from this session is the SEC’s line of defense. To put the elements into context, Coinbase has often highlighted the fact that before its IPO in 2021 the federal authority had analyzed and approved its S-1 form, in which all of its activities were detailed.
Thus, the judge asked Peter Mancuso, one of the commission’s lawyers, to explain why no one had alerted the company to potential violations of securities laws. This then has half-acknowledged that the SEC’s analytical work was not done properly :
“Your Honor, I will simply say that the fact that the SEC clears a company to go public does not mean that the SEC blesses the company. [ou] its underlying structure [ou qu’elle] does not violate the law. […] In fact, there is no evidence to show that the SEC looked at specific assets and made specific decisions and then comforted Coinbase that it would not later turn out to be securities. »
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A judge skeptical of this answer
Faced with Peter Mancuso’s justifications, Katherine Polk Failla indicated that while she did not expect the SEC to be omniscient, she was hoping for at least a more complete analytical work :
“But I would have thought the commission was being diligent in what Coinbase was doing, and somehow I thought they would say, ‘You really shouldn’t be doing this, it’s contrary to securities laws […] so be warned that maybe one day there could be a problem”. […] Again, you may be right, but I take your answer with some skepticism. »
Despite everything, the lawyer remained on his position, which echoes to the regulatory vagueness pointed out for months in the United States.
Of course, all these discussions are non-binding and that is only one of the steps before the resolution of the conflict between the SEC and Coinbase. We saw it this week with Ripple (XRP), such cases stretch over several years before a verdict can be reached.
👉 Also in the news — Victory of Ripple’s XRP: what lessons can be learned for the cryptocurrency ecosystem?
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Source: Transcript of the preliminary hearing
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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