Top Coinbase Lawyer Asserts That Ethereum Is a Commodity As Consensys Launches ETH-Related Lawsuit Against SEC

April 27, 2024 The Daily Hodl

Coinbase Challenges SEC’s Definition of ‘Investment Contracts’ in Crypto Transactions

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Coinbase Files Legal Challenge Against SEC for Crypto Regulation Clarity

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Coinbase disputes SEC’s crypto authority in final bid to toss regulator’s suit

October 25, 2023 Coin Telegraph

Coin Telegraph

Coinbase says the SEC’s definition of an investment contract isn’t in line with U.S. securities laws.

The United States Securities and Exchange Commission overstepped its authority when it classified Coinbase-listed cryptocurrencies as securities, the exchange has argued in its final bid to dismiss a lawsuit by the securities regulator.

In an Oct. 24 filing in a New York District Court, Coinbase chastised the SEC, claiming its definition for what qualifies as a security was too wide and contested that the cryptocurrencies the exchange lists are not under the regulator’s purview.

“The SEC’s authority is limited to securities transactions. Not every parting of capital with a hope of gain qualifies, and trades over Coinbase are only securities transactions if they involve ‘investment contracts.’ The transactions at issue here do not.”

Coinbase claimed the SEC has undertaken a “radical expansion of its own authority” and claimed jurisdiction “over essentially all investment activity,” which only Congress is entitled to do under the major questions doctrine.

In an Oct. 24 X post, Coinbase chief legal officer Paul Grewal echoed the claims, saying the SEC’s definitions have “no limiting function at all.”

By arguing that any purchase in which the buyer hopes for an increase in value constitutes an investment contract-and therefore a security-the SEC is attempting a radical expansion of its own authority. Only Congress can do that as the major questions doctrine makes clear. 2/3
— paulgrewal.eth (@iampaulgrewal) October 24, 2023

Coinbase’s recent filing comes in response to the SEC’s Oct. 3 rebuttal where it asked the court to reject Coinbase’s dismissal motion, iterating its belief that various cryptocurrencies Coinbase listed were investment contracts under the Howey test.

The SEC sued Coinbase on June 6, claiming the exchange violated U.S. securities laws by listing several tokens it considers securities and not registering with the regulator.

Coinbase filed the motion for judgment on June 29 arguing the SEC was abusing its power and violating Coinbase’s due process rights.

Judge Katherine Polk Failla, who oversees the case, may ask Coinbase and the SEC to appear in court for oral arguments and then issue judgment on the case, dismiss it, or move for it to be heard in front of a jury.

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Coinbase Pushes SEC To Respond to Crypto Exchange’s Petition for Rulemaking Within 30 Days

October 15, 2023 The Daily Hodl

Coinbase continues push to compel SEC to act on crypto rulemaking petition

October 14, 2023 Coin Telegraph

Coin Telegraph

Coinbase’s Chief Legal Officer Paul Grewal has once again called for a mandamus to compel the SEC to respond to the firm’s crypto rulemaking petition.

Coinbase has doubled down on its push for a court order compelling the U.S. Securities and Exchange Commission to act on the firm’s crypto rulemaking petition.

Coinbase wants a mandamus issued within 30 days to compel the SEC to give an official answer on whether it will accept or deny the petition.

The SEC submitted a long-awaited status update on Oct. 12, vaguely stating that “commission staff provided a recommendation” to the SEC over Coinbase’s petition, but did not divulge any further details.

In an Oct. 13 X post, Coinbase’s Chief Legal Officer Paul Grewal slammed the SEC for dragging its heels, as he called for a mandamus to force the SEC into adequately outlining its intentions.

We’ve filed our response with the Third Circuit. Tl;dr: the SEC’s unilluminating “update” is mere bureaucratic pantomime and confirms that nothing short of mandamus will prompt the agency to take its obligations seriously. 1/3 https://t.co/DC1o8EflcH
— paulgrewal.eth (@iampaulgrewal) October 14, 2023

Grewal also shared Coinbase’s response to the SEC update that it filed with the Court of Appeals for the Third Circuit.

“The SEC’s unilluminating report is mere bureaucratic pantomime and confirms that nothing short of mandamus will prompt the agency to take its obligations seriously. It took more than a year and an order from this Court to elicit even a staff-level recommendation,” the response reads, adding that:

“The Commission has resolved not to conduct the rulemaking Coinbase requested, and it will exploit every bureaucratic artifice in its arsenal to forestall judicial review so long as the Court allows it.”

*Coinbase's response to the SEC update. Source: Paul Grewal on X.*

Coinbase initially filed the rulemaking petition in July 2022, requesting the SEC to “propose and adopt rules” to govern the crypto market, including potential rules to clearly outline which digital assets fall under the definition of securities.

After the SEC failed to respond, Coinbase filed a petition for mandamus nine months later, seeking the court to compel the SEC to give a “yes or no” answer.

However, the SEC has fired back on multiple occasions, refuting the need to meet Coinbase’s requirements while also asking the court to deny Coinbase’s petition for mandamus.

In mid June, the SEC then asked the court for an additional 120 days to respond to the rulemaking petition. Such a timeline suggests that the agency may have an answer by the end of October or early November.

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Top US Crypto Exchange Coinbase Asks Court To Toss SEC Lawsuit, Accuses the Regulator of Violating Due Process

August 5, 2023 The Daily Hodl

Coinbase to file order seeking dismissal of SEC lawsuit

August 4, 2023 Coin Telegraph

Brian Armstrong

Paul Grewal said Coinbase will seek to dismiss the SEC’s suit on Aug. 4 which will argue that it never sold securities as the regulator alleged.

Coinbase plans to file an order seeking dismissal of the lawsuit by the Securities and Exchange Commission on Aug. 4, with the crypto exchange’s legal chief saying it expects to win the case.

On its Aug. 3 second-quarter 2023 earnings call, Coinbase chief legal officer Paul Grewal expressed confidence the exchange would win the court case brought by the regulator.

“With respect to the litigation with the SEC, I want to be very clear. We do think we can win. We expect to win.”

The SEC sued the exchange on June 6 alleging it sold unregistered securities and operated as an unregistered securities exchange. Grewal said Coinbase will file a motion asking the court to dismiss the lawsuit on Aug. 4.

“Tomorrow [...] We will be moving the court for an order dismissing the case in its entirety.”

Grewal said it will argue that Coinbase did not list securities on its platform, that the SEC has no regulatory authority over crypto exchanges and it never suggested to Coinbase there was a requirement to register when it declared Coinbase’s registration statement effective in April 2021.

He expects the brief laying out its arguments will be fully submitted and considered by the court at the end of October.

“Our goal across not just the litigation, but all of our efforts engaging with the SEC and engaging with the U.S. government as a whole is to achieve regulatory clarity,” Grewal said.

“The reason why we are so focused on pushing for regulatory clarity here in the US is that at present, under the status quo, we have very conflicting messages about what the law provides,” said Grewal.

He gave the example of conflicting statements from SEC chair Gary Gensler and CFTC chair Rostin Behnam on the legal status of Ether (ETH).

6/13/23, Ltr to the 3d Circuit: "The Commission has not yet decided what action to take on that petition."

Today: “We can get to crypto later.”

Is there any serious question that a decision was made to deny sensible rules but deliberately withheld from the public?…
— paulgrewal.eth (@iampaulgrewal) August 3, 2023

Behnam said in a March Senate hearing that ETH was a commodity while Gensler has previously stated all cryptocurrencies besides Bitcoin (BTC) are a security.

Many of the laws currently applicable to the space “were written well before the internet even existed,” Grewal added.

“Regardless of any particular outcome on any motion or any court case, clarity itself is the goal. That's how we define winning.”

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Coinbase Chief Legal Officer Calls Out SEC, Says Regulator Defying Questions From Federal Court

June 19, 2023 The Daily Hodl

Coinbase blasts SEC for ‘no straight answers’ following court order

June 19, 2023 Coin Telegraph

Appeals Court

The comment from the crypto exchange came after the SEC asked for more time to respond to Coinbase's rulemaking petition.

Coinbase has slammed the United States securities regulator for failing to answer questions asked in the U.S. Court of Appeals as part of its ongoing legal battle with the regulator.

In a June 17 letter filed in the Court, lawyers for the crypto exchange accosted the Securities Exchange Commission for continuing to offer “no straight answers” to the Court in relation to Coinbase’s rulemaking petition, which calls on the SEC to establish a regulatory framework for digital assets.

“When ordered by this Court to address the stark inconsistency between its litigating position and its actions and statements elsewhere, the SEC still offers no straight answers and instead repeats its talking points,” Coinbase’s letter said.

The letter was in response to the SEC’s June 13 submission requesting an additional 120 days to reply to Coinbase’s rulemaking petition.

Coinbase claimed the SEC is reluctant to inform the Court of updates on its decision, saying it “bristles even at being ordered to update the Court on its progress.”

The firm claimed the impact of the SEC’s silence, the lengthy delays and its enforcement actions continue to weigh on the crypto industry and SEC chair Gary Gensler "continues to charge well down the path to irreparably damaging a U.S. public company and an entire industry.”

On June 17, Coinbase’s chief legal officer, Paul Grewal, said in a series of tweets that it’s “unusual for the government to defy a direct question from a federal court.”

We couldn't wait until our deadline next week to address the SEC's response to the June 6 order from the Third Circuit. It is unusual for the government to defy a direct question from a federal court. But the SEC’s evasive response goes further, as we set out today. 1/5 pic.twitter.com/ssULmUpzi2
— paulgrewal.eth (@iampaulgrewal) June 17, 2023

Grewal said he’s hoping for the Court to grant a writ of mandamus — a court order to a government official ordering them to fulfill their official duties under the law — given thathe SEC knocked back Coinbase’s petition.

Coinbase is also submitting that the court instead set a deadline of 60 days or less starting from June 13 — the date of the SEC’s request.

In a separate case, the SEC sued Coinbase on June 6, alleging the trading platform broke various securities rules, most notably for purportedly offering cryptocurrencies that the regulator considers to be unregistered securities.

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Paul Grewal

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