SEC - Page 26

The United States Securities and Exchange Commission (SEC) has rejected Coinbase’s request for an interlocutory appeal in their ongoing legal dispute, citing manipulation of the appeal’s question to fit legal criteria under 28 U.S.C. § 1292(b).

The SEC articulated this in a filing with the U.S. District Court for the Southern District of New York on May 10, stating, “Coinbase’s attempts to manipulate the question for appeal to shoehorn it into a certifiable question under 28 U.S.C. § 1292(b) are self-defeating.”

The core of the dispute revolves around Coinbase’s dissatisfaction with the Howey test, which the SEC uses to determine whether an offering qualifies as a security.

The SEC’s filing reiterates Coinbase’s antagonism towards the test and existing securities regulations, suggesting that Coinbase structured its business to avoid compliance costs, summarized by the SEC’s remark, “Coinbase just does not like the answer.

Having made the weather, Coinbase cannot now complain that it is raining.”

On April 12, Coinbase filed for the appeal, challenging the notion that an investment contract necessitates a post-sale obligation.

This led to a debate over whether this forms a controlling question—a significant legal query that could influence the lawsuit’s outcome.

The SEC opposes this appeal, arguing that Coinbase has failed to present a consistent interpretation of what constitutes a “contractual undertaking.”

The agency emphasized that no court in the past 80 years has required such post-sale obligations.

READ MORE: Ethereum Co-Founder Joseph Lubin Criticizes SEC for Stifling Innovation, Threatening U.S. Financial Landscape

According to the SEC, “Coinbase remains unable to advance a single, coherent version of this theory, which it now claims presents a controlling question.”

Moreover, the SEC believes that Coinbase’s proposal of a new legal test and disagreement with the court’s previous decision do not justify the certification of an appeal.

The filing states, “Interlocutory review is not warranted simply because Coinbase proposes a new legal test and disagrees with the Court’s rejection of that test.”

The SEC initiated legal action against Coinbase in June 2023, accusing the exchange of violating federal securities laws by listing 13 tokens it claims are securities.

Coinbase maintains that the transactions on its platform do not fall under securities regulations—a stance directly opposed by the SEC, which considers some of these transactions to constitute “investment contracts” under federal law, as noted in court documents dated March 27.

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Binance, the global cryptocurrency exchange, has recently received approval from the Financial Intelligence Unit (FIU) in India, allowing it to offer services in the country.

This development positions Binance as the second offshore crypto exchange to receive such regulatory approval, following KuCoin.

In a CoinDesk report, FIU head Vivek Agarwal stated, “Binance is now a registered entity.”

The approval comes after Binance, along with KuCoin and other major exchanges like Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, were issued non-compliance notices by Indian authorities in December 2023.

The Indian Finance Ministry had subsequently directed its IT department to block access to these platforms in mid-January 2024.

These regulatory challenges prompted several exchanges to seek compliance with FIU requirements to continue operating in India.

While KuCoin and Binance successfully navigated the regulatory landscape to reinstate their services, others such as OKX and BitStamp opted to cease operations within the country.

READ MORE: Australia’s Tax Office Targets 1.2 Million Crypto Users in Compliance Crackdown

In response to India’s stringent tax laws on cryptocurrency—comprising a 30% tax on gains and a 1% tax deduction at source on each transaction—many Indian investors turned to foreign exchanges like Binance. At its height, Binance handled 90% of crypto trading volume from India.

The Indian market’s heavy tax burden led to a significant migration of crypto traders and businesses to more favorable regulatory environments abroad.

Consequently, the remaining crypto exchanges in India faced difficulties in building trust with investors, further hampered by the absence of robust banking solutions.

Despite these challenges, India remains a key market for major cryptocurrency exchanges.

However, the regulatory uncertainty and stringent tax measures have cooled its appeal on the global crypto stage.

As of the latest updates, Cointelegraph has reached out to both Binance and FIU for comments but has not received any response yet.

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To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.

The United States Securities and Exchange Commission (SEC) has rejected Coinbase’s request for an interlocutory appeal in their ongoing legal dispute, citing manipulation of the appeal’s question to fit legal criteria under 28 U.S.C. § 1292(b).

The SEC articulated this in a filing with the U.S. District Court for the Southern District of New York on May 10, stating, “Coinbase’s attempts to manipulate the question for appeal to shoehorn it into a certifiable question under 28 U.S.C. § 1292(b) are self-defeating.”

The core of the dispute revolves around Coinbase’s dissatisfaction with the Howey test, which the SEC uses to determine whether an offering qualifies as a security.

The SEC’s filing reiterates Coinbase’s antagonism towards the test and existing securities regulations, suggesting that Coinbase structured its business to avoid compliance costs, summarized by the SEC’s remark, “Coinbase just does not like the answer.

Having made the weather, Coinbase cannot now complain that it is raining.”

On April 12, Coinbase filed for the appeal, challenging the notion that an investment contract necessitates a post-sale obligation.

This led to a debate over whether this forms a controlling question—a significant legal query that could influence the lawsuit’s outcome.

The SEC opposes this appeal, arguing that Coinbase has failed to present a consistent interpretation of what constitutes a “contractual undertaking.”

The agency emphasized that no court in the past 80 years has required such post-sale obligations.

READ MORE: Ethereum Co-Founder Joseph Lubin Criticizes SEC for Stifling Innovation, Threatening U.S. Financial Landscape

According to the SEC, “Coinbase remains unable to advance a single, coherent version of this theory, which it now claims presents a controlling question.”

Moreover, the SEC believes that Coinbase’s proposal of a new legal test and disagreement with the court’s previous decision do not justify the certification of an appeal.

The filing states, “Interlocutory review is not warranted simply because Coinbase proposes a new legal test and disagrees with the Court’s rejection of that test.”

The SEC initiated legal action against Coinbase in June 2023, accusing the exchange of violating federal securities laws by listing 13 tokens it claims are securities.

Coinbase maintains that the transactions on its platform do not fall under securities regulations—a stance directly opposed by the SEC, which considers some of these transactions to constitute “investment contracts” under federal law, as noted in court documents dated March 27.

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To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.

Ethereum co-founder Joseph Lubin has criticized the United States Securities and Exchange Commission (SEC) for stifling innovation, potentially threatening the existing financial landscape of the country.

Speaking at the FT Live’s Crypto and Digital Asset summit in London, Lubin discussed Consensys’s lawsuit against the SEC following a Wells notice from the regulator.

He expressed concerns about the SEC’s approach, stating, “The SEC appears to have reclassified Ether as a security without telling anybody that that’s the case.

“They are going about a strategic series of enforcement actions rather than open discourse and clear rulemaking.”

Lubin, CEO of Consensys — the company behind the MetaMask wallet — articulated that the SEC’s enforcement actions are creating a climate of fear, uncertainty, and doubt within the cryptocurrency industry.

He believes this is an attempt to paralyze it and potentially force the company to relocate offshore.

Highlighting a lack of regulatory clarity, Lubin pointed out that the Commodity Futures Trading Commission had previously categorized Ether as a commodity.

He emphasized the firm’s legal action against the SEC as a means to seek greater clarity from U.S. courts.

Moreover, Lubin discussed the upcoming deadline for the SEC to decide on the approval of Ether spot exchange-traded funds (ETFs), which he sees as another motivator behind the SEC’s recent actions against Ethereum.

READ MORE: Starknet Foundation Launches $5 Million Seed Grants Program to Boost Final-Stage Blockchain Projects

He suggested, “We believe that there’s a flurry of activity designed to enable them to say that their action wasn’t capricious in the very likely event that they deny the Ether spot ETFs.”

He also noted the significant capital influx into the ecosystem following the approval of spot Bitcoin ETFs and speculated that the SEC is wary of similar movements towards Ethereum, given its improvements in scalability and usability.

Furthermore, Lubin speculated on the broader implications of decentralized finance, suggesting that the banking industry might be intimidated by the potential shift of customers moving assets into digital formats.

“The SEC probably doesn’t want to see a wave of innovation that will really transform the landscape,” Lubin commented on the regulator’s stance.

Discussing the necessity of a favorable outcome in Consensys’s legal battle with the SEC, Lubin emphasized its importance for the cryptocurrency and technology sectors across the U.S.

He criticized the SEC’s claims that Coinbase and MetaMask’s wallets are functioning as broker-dealers, labeling it a “preposterous notion.”

The debate continues over whether to register MetaMask as a broker-dealer, and the implications this holds for every user of the wallet.

“We’re at odds over whether we should register MetaMask as a broker-dealer. Should every MetaMask user have to register their wallet as a broker-dealer, it’s chilling,” he concluded, highlighting the potential for far-reaching effects on the entire U.S. technology industry due to the SEC’s actions.

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To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.

Binance, the global cryptocurrency exchange, has recently received approval from the Financial Intelligence Unit (FIU) in India, allowing it to offer services in the country.

This development positions Binance as the second offshore crypto exchange to receive such regulatory approval, following KuCoin.

In a CoinDesk report, FIU head Vivek Agarwal stated, “Binance is now a registered entity.”

The approval comes after Binance, along with KuCoin and other major exchanges like Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, were issued non-compliance notices by Indian authorities in December 2023.

The Indian Finance Ministry had subsequently directed its IT department to block access to these platforms in mid-January 2024.

These regulatory challenges prompted several exchanges to seek compliance with FIU requirements to continue operating in India.

While KuCoin and Binance successfully navigated the regulatory landscape to reinstate their services, others such as OKX and BitStamp opted to cease operations within the country.

READ MORE: Australia’s Tax Office Targets 1.2 Million Crypto Users in Compliance Crackdown

In response to India’s stringent tax laws on cryptocurrency—comprising a 30% tax on gains and a 1% tax deduction at source on each transaction—many Indian investors turned to foreign exchanges like Binance. At its height, Binance handled 90% of crypto trading volume from India.

The Indian market’s heavy tax burden led to a significant migration of crypto traders and businesses to more favorable regulatory environments abroad.

Consequently, the remaining crypto exchanges in India faced difficulties in building trust with investors, further hampered by the absence of robust banking solutions.

Despite these challenges, India remains a key market for major cryptocurrency exchanges.

However, the regulatory uncertainty and stringent tax measures have cooled its appeal on the global crypto stage.

As of the latest updates, Cointelegraph has reached out to both Binance and FIU for comments but has not received any response yet.

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To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.

Recent revelations have surfaced regarding the interactions between Nigerian officials and Binance representatives, implicating that Nigerian authorities attempted to pressure Binance into an undisclosed settlement paid in cryptocurrency.

These events reportedly transpired during meetings early in 2024.

Binance’s CEO, Richard Teng, has spoken out about the situation, specifically addressing the ongoing detention of Tigran Gambaryan, a former agent of the United States Internal Revenue Service and the current head of Binance’s financial crime compliance team. Gambaryan was detained in Nigeria while on a business trip.

According to Teng, this incident marks a concerning precedent as it reflects the potential risks global companies may face when operating internationally.

Teng’s statement condemned the Nigerian government’s approach, claiming it set a “dangerous new precedent for all companies worldwide” following the detainment of Gambaryan and another employee.

He narrated how Binance made efforts to engage positively with Nigerian officials, participating in regulatory discussions and collaborating with law enforcement to address any concerns transparently.

The matter escalated after Binance was invited to a public investigative hearing by the chairman of the House of Representatives Committee on Financial Crimes (HCFC).

Despite being prepared to address any allegations in a public forum, Teng noted that the details of the accusations were not provided to them, leading to their request to respond in writing, a proposal still pending response from the committee.

Amidst these discussions, Binance personnel were approached by unidentified individuals offering to settle the allegations secretly using cryptocurrency, demanding a substantial payment within 48 hours.

READ MORE: Sui Network Addresses Token Supply Concerns, Asserts Transparency and Third-Party Oversight

Teng disclosed that their local legal counsel was presented with these terms by an agent of the HCFC, emphasizing the secretive and urgent nature of the deal. Binance declined the offer and continued to seek a diplomatic resolution to the matter.

Following the refusal, further meetings were arranged involving representatives from various Nigerian governmental bodies, including the National Security Adviser’s office and the Central Bank of Nigeria, among others.

Despite the complexity of the situation, Teng stated that Gambaryan and Nadeem Anjarwalla, head of Binance Africa, were assured of their safety for these meetings.

However, the situation worsened when Nigerian officials detained Gambaryan and Anjarwalla, confiscated their passports and phones, and demanded that Binance comply with specific requests, including delisting the Nigerian naira from their platform.

In response to the escalating demands and the continued detention of its employees, Binance has temporarily shut down certain services in Nigeria, hoping to secure their release and resolve the situation amicably.

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Coinbase, the prominent crypto exchange, along with its CEO Brian Armstrong, finds itself embroiled in a fresh class-action lawsuit, alleging deception of investors into purchasing securities and asserting the illegality of the company’s business model.

The lawsuit, filed in the United States District Court for the Northern District of California San Francisco Division, is brought forth by plaintiffs Gerardo Aceves, Thomas Fan, Edwin Martinez, Tiffany Smoot, Edouard Cordi, and Brett Maggard from California and Florida. It alleges that Coinbase’s sales of digital assets knowingly contravened state securities laws from the company’s inception.

According to the lawsuit, tokens from Solana, Polygon, Near Protocol, Decentraland, Algorand, Uniswap, Tezos, and Stellar Lumens are deemed securities.

The plaintiffs argue that Coinbase, in its user agreement, acknowledges itself as a “Securities Broker,” thereby characterizing the digital asset securities it sells as investment contracts or other securities.

They further contend that Coinbase Prime brokerage functions as a securities broker.

In seeking resolution, the plaintiffs demand complete rescission, statutory damages pursuant to state law, and injunctive relief via a jury trial.

This legal action echoes a prior class-action suit alleging consumer detriment stemming from Coinbase’s sale of securities.

READ MORE: OpenAI Faces Privacy Complaint Over Chatbot Accuracy Concerns

Coinbase has countered these allegations, asserting that secondary crypto asset sales fail to meet securities transaction criteria and challenging the applicability of securities regulations.

This recent lawsuit diverges from Coinbase’s widely publicized legal clash with the U.S. Securities and Exchange Commission, which also scrutinizes whether tokens traded on Coinbase should be categorized as securities.

In response to a judge’s ruling permitting the case to proceed, Coinbase has lodged an interlocutory appeal.

In a filing dated April 26 in the U.S. District Court for the Southern District of New York, John Deaton, a crypto lawyer currently campaigning to unseat Senator Elizabeth Warren, submitted an amicus brief supporting a motion for interlocutory appeal on behalf of 4,701 Coinbase customers.

Despite legal challenges, Coinbase reported a robust resurgence in the first quarter of 2024, buoyed by market performance improvements and the rollout of spot Bitcoin exchange-traded funds.

Notably, the exchange recorded $1.6 billion in total revenue and $1.2 billion in net income for the first quarter, achieving $1 billion in adjusted earnings before interest, taxes, depreciation, and amortization.

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To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.