Expert: Coinbase has high chance of winning lawsuit, 70% chance of dropping SEC charges

The U.S. Securities and Exchange Commission (SEC) sued Coinbase in June last year, accusing it of providing securities trading, brokerage and clearing services without registration, and selling more than ten types of products such as SOL, ADA, MATIC, etc. Cryptocurrencies are defined as securities.

Coinbase countered and sought to dismiss the lawsuit. The U.S. District Court for the Southern District of New York held a hearing last Wednesday to discuss whether Coinbase’s listed tokens are securities.

Bloomberg Analyst: Coinbase has a high chance of winning the lawsuit

According to the court’s five-hour hearing, Bloomberg Senior Litigation Analyst Elliott Stein published an article in which he expressed his opinion on Coinbase’s victory. The probability is very optimistic and predicts a 70% possibility, believing that the SEC's accusations are expected to be completely dismissed.

At first, I thought Coinbase might succeed in getting the main trading-related charges dismissed at the SEC hearing, but the staking and brokerage charges might not. However, after the hearing, I think Coinbase will likely win the entire case.

Stein further explained that it was a turning point when Coinbase provided a more precise definition of “investment contract” than the SEC.

I think the scheme offered by Coinbase is more attractive because it requires an investment in the business and enforceable obligations, rather than just investing in the ecosystem.

He also mentioned last year’s SEC lawsuit against Ripple, in which the judge ruled in July that exchange sales of XRP were not considered securities, which had an important impact on Coinbase’s lawsuit.

The judge is expected to make a final ruling in the next few weeks

After a hearing last week on whether to dismiss the SEC lawsuit, Judge Katherine Polk Failla is expected to make a final ruling in the next few weeks. Next, if Katherine Polk Failla refuses to dismiss the SEC lawsuit, the case will enter the discovery phase. At the end of the discovery phase, both the SEC and Coinbase may file a summary judgment motion.

If the judge is still not convinced, it will go to trial, where a jury will decide whether the defendant is guilty or not, but this may not happen until 2025.

Coinbase calls on the SEC not to unilaterally expand the scope of regulation

Paul Grewal, Chief Legal Officer of Coinbase, tweeted that the SEC continues to claim that it has broad authority over all investments while providing no definition of investment contracts. Limitation principle, the SEC cannot unilaterally expand and redefine its own regulatory scope, which should be determined by Congress and the ongoing legislative discussions on the relevant regulatory framework: Coinbase does not offer securities, we are confident in our legal arguments and look forward to the court Make decisions that bring clarity to the industry.

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