Coinbase legal chief Paul Grewal criticized the recent SEC-Binance court hearing after reviewing its transcript.
The top two crypto exchanges in the world, Binance and Coinbase, are currently in legal battle with the US Securities and Exchange Commission (SEC). The lawsuits are focused on, among other things, the exchanges trading securities without the regulator’s permission.
Coinbase’s legal chief officer now says that SEC had a chance to define securities in the context of digital assets, but dodged it.
Coinbase legal chief questions SEC’s intent
Paul Grewal, Coinbase Chief Legal Officer has criticised the SEC V. Binance suit after a detailed review of the court’s transcript. In a series of tweets, the lawyer questions the regulator’s intentions for bringing the suit.
This suit followed a series of accusations on Binance by the SEC. The regulator had requested that the US Federal Court freeze the assets of Binance and its subsidiary, Binance.us. However, an agreement was reached with a consent judgement allowing Binance to continue to operate under stricter conditions.
Paul Grewal’s tweets cast doubt on the SEC’s right to “reserve” and “get past” the motion under the court’s Rule 8.
The attorney said, on June 26, that the regulator introduced faulty statement regarding Rule 8.
Grewal noted that while he was reviewing the Binance hearing before Judge Jackson, he saw that the court had asked the SEC about the defendant trading tokens that are not considered as securities. The court asked: are the rest of the tokens security or not?
Counsel to the Applicant dodged the question stating that the SEC reserved its right as they are still in the pleading stage. The SEC counsel said they would need to get into the discovery stage where a full assessment can be done around the categorisation.
“We — at this time, Your Honor, we’re reserving our rights, just given we’re at the pleading stage we have to get into discovery where we can make a full assessment. But our position, Your Honor, is that if one of these coins are a security, we’ve won,” the SEC counsel said.
Grewal noted that the SEC approach was dodgy and asked why the regulator could get past the question and dismiss it into discovery.
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