The U.S. Securities and Exchange Commission (SEC) believes Coinbase was aware of potential securities law violations before the regulator filed suit against the cryptocurrency exchange, new court documents show.
In a new court filing, the SEC claims that the cryptocurrency company made a considered decision to proceed with its business despite knowing it was engaging in illegal conduct.
“Coinbase also explicitly discourages crypto asset issuers from using ‘questionable statements’ in marketing materials ‘traditionally associated with securities.
Since becoming a public company, Coinbase has repeatedly informed its shareholders that crypto assets traded on its platform may be considered securities and that its actions may therefore violate federal securities laws — including in a registration statement that it now points to as evidence of the SEC’s approval of its actions.
These actions make clear that Coinbase understood that securities laws may apply to its conduct and knew which rules to consider when evaluating the legality of its actions, but nonetheless made a considered decision to take this risk in the name of growing its business.”
The SEC initially sued Coinbase last month, accusing it of selling unregistered securities after listing a handful of crypto assets, including Cardano ( ADA ), Solana ( SOL ), and Polygon ( MATIC ), as securities.
In late June, Coinbase filed a motion to dismiss the case, arguing that the SEC lacked jurisdiction over the matter.
