Crypto exchange Coinbase is refuting claims by the US Securities and Exchange Commission (SEC) that nine digital assets listed on its platform are securities.
Coinbase Chief Legal Officer Paul Grewal said The exchange rejects the SEC’s claim that nine of its listed digital assets are securities in its lawsuit against a former employee and two others accused of insider trading.
According to Grewal, Coinbase conducts a rigorous review process before listing digital assets to ensure securities are kept off the platform.
“We disagree 100% with the SEC’s assertion that all crypto assets we list are securities.
Coinbase has a rigorous process for analyzing and reviewing each digital asset before making it available on our exchange – a process that the SEC itself has reviewed.
Coinbase’s Best Lawyer said that although the US Department of Justice (DOJ) and the SEC review the same evidence, only the latter considers the crypto assets implicated in the insider trading case to be securities.
“We have been cooperating with the DOJ and the SEC on this investigation. The DOJ has reviewed the same facts and has elected not to press charges of securities fraud against those involved.
In his insider trading casethe SEC complaint states that the agency believes nine publicly traded Ethereum-based tokens are securities. The agency points the finger at Amp (GPA), Rally (RLY), PowerLedger (POWER), XYO Network (XYO), Rari governance token (TMN), LCX (LCX), DerivDAO(DDX), DFXFinance (DFX) and Kromatica (KROM).
“… each of the nine companies that offered these crypto asset securities and their promoters further highlighted, among other things, their efforts to get their crypto asset securities listed on secondary trading platforms, and the critical role that executives and other people in the company have been instrumental in making the company a success, thereby increasing the security value of crypto assets.
IIn other words, each of the nine companies invited people to invest on the promise that they would make future efforts to improve the value of their investment.
These characteristics of the definition of a security continue to be true for the nine crypto asset securities that are the subject of trading in this complaint, including the issuers’ and their management teams’ continued statements regarding the value token investment, management efforts that contribute to the value of the tokens and the availability of secondary markets to trade the tokens.
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