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Coinbase May Likely Win Lawsuit Against SEC
Coinbase, one of the largest cryptocurrency exchanges in the United States, is currently embroiled in a lawsuit against the U.S. Securities and Exchange Commission (SEC).
The lawsuit, filed in 2022, seeks to compel the SEC to disclose whether it has accepted or denied a petition that Coinbase submitted earlier that year. The petition requested that the SEC propose and adopt rules to govern the regulation of securities offered and traded via digitally native methods, including potential rules to identify which digital assets are securities.
“A (writ of) mandamus is an order from a court to an inferior government official ordering the government official to properly fulfill their official duties or correct an abuse of discretion.” As explained by Cornell Law School’s LII.
Despite the ongoing legal battle, attorney and XRP supporter John Deaton is optimistic that Coinbase will ultimately prevail. In a recent tweet to his more than 262,000 followers, Deaton stated that he has read the Coinbase writ and predicts a win for the exchange.
Deaton believes that Coinbase is on solid legal grounds and that the law is on the exchange’s side. He points to his research on Mandamus Writs, which are court orders that compel government officials to properly fulfill their official duties or correct an abuse of discretion. Deaton’s research has led him to conclude that Coinbase’s lawsuit is on strong legal footing and that the crypto industry as a whole will ultimately prevail in court.
Coinbase’s chief legal officer, Paul Grewal, has noted that the SEC is required by law to respond to petitions “within a reasonable time,” but that they have not yet responded to Coinbase’s petition from July 2022, which is why the exchange filed its action in court.
The outcome of the lawsuit remains to be seen, but Deaton’s prediction and Coinbase’s legal arguments suggest that the exchange has a good chance of coming out on top. If successful, Coinbase’s lawsuit could have significant implications for the regulation of digital assets in the United States, particularly with regard to identifying which assets are securities. It could also set a precedent for other crypto companies to challenge regulatory agencies on issues related to digital assets.