Coinbase Argues SEC Lawsuit Flawed, Citing Binance BNB Token Ruling

Coinbase Argues SEC Lawsuit Flawed, Citing Binance BNB Token Ruling

Coinbase is arguing that the Securities and Exchange Commission's (SEC) lawsuit against it is flawed, citing the recent ruling in the Binance BNB token case. In a motion filed with the U.S. District Court for the Southern District of New York, Coinbase said that the SEC's case fails to meet the requirements of the Howey Test, which is used to determine whether a transaction is an investment contract and therefore subject to securities laws. Coinbase argued that the secondary sale of BNB tokens did not qualify as an investment contract because they were not offered as an investment and did not promise investors a profit. The company also accused the SEC of "arbitrary and capricious rulemaking" and said that the agency has failed to provide consistent guidance on the regulatory landscape. Earlier this month, a U.S. federal judge dismissed part of the SEC's case against Binance, ruling that the sale of BNB tokens did not constitute a securities offering. Coinbase's motion is the latest development in the ongoing legal battle between the company and the SEC. The SEC has been investigating Coinbase for several years, and in July 2021, the agency announced that it had opened a formal investigation into the company's lending program.