Coinbase, the popular crypto exchange, has achieved a significant victory in an ongoing trial. The U.S. Court of Appeals for the Second Circuit ruled in favor of Coinbase, confirming that its platform does not violate the Securities Exchange Act. This ruling will impact many individuals across the country who used Coinbase to trade tokens between October 8, 2019, and March 11, 2022. The central question in this disagreement was whether the crypto traded on Coinbase could be considered securities.
The plaintiffs in the case invoked several sections of the Securities Exchange Act of 1934 and the Securities Act of 1933, as well as securities laws in New Jersey, Florida, and California. They claimed that Coinbase was selling unregistered securities and violating other securities regulations.
However, Coinbase argued that the sale of secondary crypto assets did not meet the requirements for securities transactions, challenging the applicability of securities laws. After careful review of the evidence, the Court of Appeals overturned some of the lower court’s rulings and upheld others.
In determining whether Coinbase could be held liable for selling unregistered securities, the court examined Section 12(a)(1) of the Securities Act. However, the plaintiffs’ requests for rescindment under Section 29 of the Securities Exchange Act were denied due to a lack of evidence regarding the specific contracts involved in the transactions. The court’s judgment was heavily influenced by the interpretation of Coinbase’s user agreements, which had changed over time.
In other crypto news today, NFTFN offers a glimpse into the future of investing with its Stage 2 Presale, boasting a potential 50X return.
