Crypto lawyers have hailed a U.S. judge's recent decision to dismiss charges against Coinbase as a victory for self-service wallets and decentralized financial applications (DeFi).
U. S. District Judge Catherine Failla on March 27 denied the SEC's motion to dismiss the case, ruling that the #SEC had "adequately demonstrated" that #Coinbase was unlicensed and that its #cryptocurrency herd offering was an unregistered security.
The judge also ruled that the SEC failed to prove that Coinbase was brokering through Coinbase Wallet, a crypto wallet app that gives users full control over their assets.
This is a pretty big win for browser-based wallet extensions, front-end apps and other similar applications," said Zach Rosenberg, an attorney at Ethena Labs, in a March 27 post.
Rosenberg emphasized that "[the case] is not just about Coinbase winning, but the rationale behind it. " He clarified that Coinbase's assistance to Wallet users in finding #token prices does not mean that Coinbase is acting as a broker that "does the routing or makes recommendations.
Coinbase's victory on this issue at this stage means that, even accepting all of the SEC's reasonable arguments as categorically correct, the court does not believe that there is a strong basis for concluding that Coinbase acted as a broker in offering the Coinbase Wallet This means that there is no strong basis for concluding that Coinbase acted as a broker.
The court ruling could be used to fend off accusations that app developer #BTC , which is facing a similar lawsuit, acted as an unregistered broker.
In a statement to X, Mike Selig, a partner at law firm Willkie Farr and Gallagher, said the dismissal of the case against Coinbase Wallet was a "significant setback" for the SEC.
The SEC tried to prevent the development of peer-to-peer software. It didn't work.
However, Jake Czerwinski, head of legal services at cryptocurrency firm Variant, said that while there are "some positives" in the judge's ruling, "overall it's a victory for the SEC.
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