The ongoing case between the United States Securities and Exchange Commission (SEC) and Coinbase has received wide scaled attention from within the crypto industry as well from outside it. Adding to the list is John Deaton, founder and host of CryptoLaw, which was launched in 2021 to provide digital asset holders with information, news, and analysis on key U.S. legal and regulatory developments.
Deaton has a deep relationship with the crypto industry and also served as the lawyer for the Ripple versus SEC case. Now, Deaton has shared a very important update in the ongoing Coinbase versus SEC lawsuit.
In a recent tweet, Deaton stated that that 2,331 customers have joined to potentially be heard as amicus curiae in SEC v. Coinbase. An amicus curiae is an individual or organization who is not a party to a legal case, but who is permitted to assist the court by offering information, expertise, or insight that has a bearing on the issues in the case. Explaining the significance of the move, he said:
It’s about speaking up for ourselves and not letting the SEC or Coinbase speak for us.
In June, shortly after the SEC filed its lawsuit against Coinbase, Deaton showed an interest in participating in the lawsuit. He had targeted the regulator and had called out its behaviour which involved gaslighting the court for its own advantages. He stated:
Some of us just don’t want the SEC gaslighting the Court that it’s protecting us.
Additionally Deaton released an online form, which he says is to establish a putative class of customers and crypto account holders who use the Binance and Coinbase platforms- the two largest exchanges hit by enforcement actions from the SEC. He suggested that if there is interest, then a request to participate might be made and possibly granted amicus status to make sure users’ voices are heard.
On June 6th, the SEC had filed its lawsuit containing at least 13 charges months after the Wells Notice from March. The SEC accused the firm of trading at least 13 crypto assets that are securities and were not registered. In the past week, Coinbase filed its answer and notice of intent to file a motion to dismiss the SEC’s complaint against it citing their allegations to be meritless.
Responding to the lawsuit, Coinbase stated that the SEC lacks authority to pursue civil claims because crypto assets traded on its platform are not “investment contracts” and, thus, not securities. According to a recent court ruling, the SEC will respond to Coinbase’s initial legal defense on July 13.
The hearing date has been moved up due to a defense tactic used by Coinbase, in which the exchange filed its initial answer 40 days before the deadline of Aug. 7.
After Wells Notice, the exchange retaliated with narrow legal action. Upon Coinbase’s petition, the US Court of Appeals for the Third Circuit responded to the complaint against the SEC regarding the need for clear rules for trading digital assets. Despite severe criticism and consistent attacks from Coinbase, SEC continued to be rigid and denied firm’s request disregarding their rights.
Notably, Coinbase has shown optimism and courage in the wake of the recent lawsuit and the CEO in the interview said that any clarity from the courts, irrespective of the outcome, will be a “step in the right direction.” It also said that it places its trust in the US court in case of no engagement from the Congress.