Why the lawsuit between Coinbase and the US SEC will determine the end or beginning of this year’s bull market?
US exchange giant Coinbase is still embroiled in a legal battle with the US Securities and Exchange Commission (SEC), which is challenging the regulatory framework for cryptocurrency operations in the US. The main reason for this lawsuit is the SEC’s accusation that Coinbase operated without registration, which could set a precedent for the regulation of digital assets and reshape the landscape of the cryptocurrency industry.
The US District Judge Katherine Polk Failla has rejected Coinbase’s motion to dismiss the case, marking a crucial turning point in the SEC’s lawsuit against Coinbase.
The core of the lawsuit between Coinbase and the SEC revolves around whether certain transactions facilitated by Coinbase qualify as “investment contracts” and thus fall under the regulation of securities laws. Judge Failla emphasized that the determination of whether something is a security is based on the actual circumstances of the transaction, rather than the label attached to it.
This argument is based on a securities law framework that has been in place for nearly 80 years and has been questioned by the crypto community regarding its applicability to cryptocurrencies. The outcome of this legal battle is expected to have far-reaching implications for the US cryptocurrency industry.
If the court sides with the SEC, it may require exchanges to operate under the same rules as national securities exchanges, introducing new restrictions and disclosure requirements, and potentially limiting the types of tokens retail investors can access. Although Coinbase argues that the SEC lacks jurisdiction and claims that the transactions on its platform do not constitute financial securities, the court’s decision to continue the case highlights the complexity of regulating the evolving crypto market.
Both the SEC and Coinbase will continue to prepare for the case until April 19, during which they may reach a settlement. The current cryptocurrency bull market, largely driven by the anticipation of a Bitcoin spot ETF, affects the overall cryptocurrency market with daily capital inflows, causing fluctuations in different types of tokens, including meme coins. If Coinbase’s custody qualifications are questioned or its exchange business is found to involve unregistered securities, it could bring uncertainty to the Bitcoin spot ETF market.
Furthermore, the prospects of an Ethereum spot ETF are becoming increasingly uncertain, indicating the SEC’s conservative stance towards cryptocurrencies. There have even been rumors that the SEC intends to classify ETH as a security, prompting close observation of the Ethereum Foundation.
In addition, the Ripple vs. SEC lawsuit, which was ruled in favor of the SEC on March 25, resulted in an injunction, seizure of illegal gains, and pre-judgment interest and civil penalties, with Ripple having to pay $1,950,768,364 to the SEC.
These events, along with the Bitcoin halving, are external factors that have a significant impact and could potentially mark the end or beginning of the bull market.
(Note: The translation is based on the provided context and may not reflect the entire original article accurately.)
