In a recent interview with Thinking Crypto, Faryar Shirzad, Chief Policy Officer at Coinbase, shed light on the protracted legal dispute between the cryptocurrency exchange behemoth and the U.S. Securities and Exchange Commission (SEC). Shirzad delved into the crucial elements of the lawsuit, Coinbase’s stance, and their aspirations for a favorable resolution.
Coinbase’s Resolute Defense
Shirzad underscored Coinbase’s unwavering commitment to defending its position in the SEC lawsuit. He disclosed that Coinbase has enlisted the support of external legal experts who share a profound belief in the case, bolstering their defense.
The Token-As-Security Debate
A central pillar of Coinbase’s argument is that, in order for a cryptocurrency token to be classified as a security, a contractual relationship with specific representations and obligations between the seller and buyer must exist. In the case of Coinbase, Shirzad emphasized that there is no direct link or privity between the token developer and the buyer, as Coinbase predominantly functions as an exchange and secondary market. Consequently, Coinbase asserts that it does not meet the criteria for classification as a security.
Awaiting the Judge’s Verdict
Shirzad acknowledged that the final verdict rests in the hands of the judge, who recently announced oral arguments scheduled for January. He expressed optimism regarding Coinbase’s position but recognized the necessity to await the judge’s ruling.
He stated, “We’re pushing aggressively. I feel good about where we’re going to land, but you know, we’ll have to see what the judge decides.”
Concerns Over the SEC’s Expansive Interpretation
Shirzad also voiced concerns about the SEC’s wide-ranging theory, which suggests that any sale for profit could conceivably be categorized as a security, drawing parallels to property, collectibles, or commodities transactions. He contended that such an interpretation would be impractical and excessively broad. Coinbase’s position remains unyielding as they await clarity from the judge’s decision.
Hopes for a Bitcoin ETF
Touching on the subject of a Bitcoin exchange-traded fund (ETF), Shirzad referred to a recent court ruling in the Grayscale case, where the court found the SEC’s actions to be “arbitrary and capricious.” He suggested that these findings could provide a blueprint for the SEC’s stance on Bitcoin ETFs. While he refrained from predicting an exact timeline, he expressed hope that the SEC would make a decision promptly and approve Bitcoin ETF applications.
Coinbase’s protracted legal battle with the SEC continues to capture the cryptocurrency industry’s attention, with Coinbase’s leadership expressing unwavering confidence in their case and an eagerness for a prompt resolution.
