There is news regarding the lawsuit by the SEC against the US crypto exchange Coinbase.
In fact, the agency has asked the court for more time to examine the documentation. This should extend the case well beyond the presidential elections in November, until well into 2025.
Crypto news: the request of the SEC in the lawsuit against the exchange Coinbase
On Wednesday, the SEC sent a letter to Judge Katherine Polk Failla requesting an extension of the deadline to complete the analysis of the documentation.
In fact, the judge had set the deadline for October 18, 2024, but the SEC is asking for time until February 18, 2025.
In the letter, the agency explains that the efforts to examine the documentation have been extended, such as the production of hundreds of thousands of documents for the defendants and especially the review of more than 133,000 documents.
In fact, it seems unthinkable that in a few weeks the agency can manage to examine more than 133,000 documents.
Furthermore, it emphasizes that previously in this case no party has requested extensions of the deadlines to complete the analysis of the documentation, implying that there should be no obstacles to the four-month extension.
Latest news and updates on the SEC lawsuit against the Coinbase exchange
Curiously, the one requesting this extension in this case is the complainant, that is, the agency that accused the exchange of offering unregistered securities to the public.
But the issue is more complex, and in reality, such a request from the SEC is absolutely understandable.
In fact, the accusations of selling unregistered securities were dropped in April, when the United States Court of Appeals for the Second Circuit declared that the sales of cryptocurrencies on the secondary market (the exchanges) do not violate the Securities Exchange Act.
In the meantime, however, Coinbase in turn had countersued the SEC, accused in particular of not having provided clear guidelines on how to behave, given that it is expressly the U.S. agency that must oversee the security market in the USA.
The exchange had requested in a subpoena the production of documentation that could justify the SEC’s accusations.
The agency then asked the court to dismiss that subpoena, but the judge in August refused, effectively siding with Coinbase.
The SEC argued that the documentation it was being asked to present was fundamentally a mass of totally irrelevant material, but Judge Failla did not agree. In fact, he essentially ordered the agency to provide all the necessary information to justify its conduct.
The SEC under accusation
So although at first it was the SEC accusing Coinbase in court of having violated the law, now the situation has reversed.
To tell the truth, Coinbase does not seem to be accusing the SEC of any specific crime, but in fact of having persecuted it unjustly.
The agency, however, is required to defend itself, and in the letter submitted on Wednesday, it specified that the Court had ordered it to undertake a review of additional documents, and the parties had agreed to review potentially responsive material. It also states that, under this agreement, it is proceeding with the collection of the material, but it needs more time.
Will the SEC give up?
It should be remembered that until now the U.S. agency has lost almost all the cases it has initiated against crypto companies accused of offering unregistered securities to the public. Furthermore, those it has not lost often ended not with a clear victory, but with a settlement between the parties.
She even gave up on some lawsuits when she realized they were destined to fail.
At this point it is difficult to understand why it is continuing to go forward against Coinbase.
One could, however, imagine that it might consider it harmful, for itself, to give up now, because since at this moment it is the same agency that is under accusation, any possible renunciation on its part could sound like a partial admission of guilt.
It should be remembered that Coinbase accuses the agency of having exaggerated with the campaign against crypto exchanges, and so far the courts seem to have supported this hypothesis.
It is possible that the objective of the SEC at this moment is to get past the presidential elections in November, and then maybe ask the exchange to end it with an agreement.
Moreover, in the event that Donald Trump wins in November, the top management of the agency will certainly be changed.
Open question
Currently, therefore, the issue still seems completely open, even if Coinbase seems safe. The SEC, however, could also come out of it, at some point, especially in case of a Trump victory and replacement of the top management.
Therefore, while on one hand the case of Coinbase against the SEC is still an open issue, and it might remain so until 2025, the issue regarding the alleged offering of unregistered securities on crypto exchanges in the USA seems to be closed.
However, it should not be forgotten that each individual cryptocurrency, and each individual token, should be examined individually to determine whether it is a security or not, and so far only a small handful of the tens of thousands of tokens and crypto present in the markets have been examined in court.