The US Court of Appeals of the Second Circuit ruled that Coinbase’s secondary sales of cryptocurrencies did not contravene the Securities Exchange Act. Is crypto winning the fight?
Coinbase secondary sales of crypto did not violate securities law
Besides its huge dispute with the US Securities and Exchange Commission (SEC) Coinbase is still embroiled in a lawsuit brought by private plaintiffs, asserting that the cryptocurrency exchange offered and sold them unregistered securities.
With the Appeals Court ruling that the sales didn’t meet the criteria for securities, the main part of the plaintiff’s argument has been defeated, although the plaintiff’s said that the latest rulings were a step forward in making cryptocurrency exchanges more accountable.
Does this mean cryptocurrencies are not securities?
The Coinbase win has much deeper implications for the crypto sector overall. Another judge ruling that secondary sales of cryptocurrencies do not constitute securities puts crypto one more massive step towards legitimacy. All those investors who want to trade cryptocurrencies and who would have this right put at jeopardy, can breathe a sigh of relief - at least until the next attack from the enforcement agencies.
New securities rules are needed
This lawsuit is yet another example of why the US needs to adapt the existing securities rules, or even better write new rules that can completely encompass the entire crypto sector, although with this space moving so rapidly with innovation, room will very likely be necessary for updated or additional laws, no matter what the SEC might think.
US lags behind
Of course this makes perfect sense to anyone except the anti-crypto Biden administration and the watchdog agencies that do its bidding. While the rest of the world moves forward with updating its financial rules, the US crawls along at a snail’s pace, as though it were some kind of third world dictator State.
The US has been the world’s champion of innovative and ground-breaking technology for businesses for decades. What has happened to this government, that it would seek to try and crush a sector that has already supplied breakthroughs in finance and in various other areas that are pushing out the frontiers of technology at breakneck speed.
US court system is still doing its job
One of the major blessings in the US financial infrastructure, is the court system, which can still be relied upon to uphold the law, even in the face of prosecutions brought by the US’s own taxpayer-funded enforcement agencies.
The Biden administration may be partly beholden to the lobbyists representing the huge commercial banks, who perhaps believe that their business is threatened by the crypto industry, but the courts certainly still appear to have the necessary neutrality to apply the law and even speak derogatively of any regulatory agency that might think it can get away with bullying and unfair interpretations of the law. Long may it continue.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
