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Coinbase shocked the crypto world when it filed a motion so the court can dismiss the lawsuit filed against it by the United States Securities and Exchange Commission (SEC). With the motion filed, many industry leaders have started weighing on the merits and XRP holder’s lawyer, John Deaton has his take on the move as well.
Coinbase Motion Has Teeth
Commenting directly on the announcement of the motion as shared by Paul Grewal, the Coinbase Chief Legal Officer, John Deaton noted that the exchange’s argument “has teeth.”
He laid down 6 cogent points to buttress his point with the first being that the US Congress has initiated the process of legislation for the industry. He believes this stance of the regulator is a showcase that the lawmakers are ready to address the core issues raised. Additionally, Deaton cited the regulatory gap argument that was publicized through the Hinman emails which also gives the trading platform a better defense.
I believe @coinbase’s Motion to Dismiss, based on the Major Questions Doctrine, has real teeth. I’m not saying that it will be granted for sure, I’m just saying it’s not your garden variety motion to dismiss where denial can easily be predicted. The motion has teeth because of… https://t.co/qVkwY31Zkm
— John E Deaton (@JohnEDeaton1) June 29, 2023
John Deaton is also optimistic that Gary Gensler’s prior position that there is no defined regulation created for the digital assets ecosystem can also strengthen and weaken Coinbase and the SEC respectively.
One key argument of the SEC vs Coinbase tussle is with respect to the offering of a product as an investment contract. Drawing on this , John Deaton noted that there has never been a case where the Judge or a Court ruled on a case in which assets purchased at the secondary market were declared a security.
Lastly, he referenced a similar case that featured West Virginia and the EPA noting that it all depends on the disposition of the judge in general.
Hope for Coinbase
Despite the positivity that surrounds its motion as highlighted by Deaton and other crypto and legal experts, there is still a slight chance the case may not entirely go in the way the trading platform expects.
As such, Coinbase has been making deliberate attempts to launch new products. One of its latest, the Base layer-2 protocol built on Ethereum has been gaining traction as it looks to onboard new smart contracts that can efficiently enhance the public’s embrace of blockchain innovations.
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