In support of a move to dismiss the SEC’s insider trading case against former Coinbase product manager Ishan Wahi and others, Coinbase submitted an amicus (“friend of the court”) brief.
Nikhil Wahi’s brother, Ishan Wahi, was fully cooperative with the inquiry, and Coinbase has also indicated that it is also being judged in the case. “Adjudicate problems at the core of Coinbase’s listing choices for seven assets, and in litigation against unsympathetic individual defendants who stole Coinbase’s nonpublic information,” the SEC requests this court in its petition.
Last week I testified to Congress about Coinbase’s futile effort to register with the SEC so we can begin to offer digital asset securities. Today we filed an amicus brief in SEC v. Wahi that explains why this misguided suit only makes things worse. 1/5https://t.co/9iWYrWwpiI
— paulgrewal.eth (@iampaulgrewal) March 14, 2023
Yet, the exchange claims that it would prefer to offer digital asset securities if legislation were not in a “state of ambiguity” despite not selling any securities.
No U.S. business can accomplish this unless the SEC offers a clear legal framework, notwithstanding Coinbase’s desire to extend its platform to incorporate digital-asset securities (such as tokenized equities).
Coinbase claims that the SEC authorized its public share offering in 2021 without mentioning that the exchange’s business model may permit the selling of securities or that it had already traded securities.
Since the SEC believed the exchange offered securities on its platform, Coinbase has declared that although it opposes the defendants’ behavior, it supports their petition.
Moreover, Coinbase contends that since their listings are neither investments nor contracts as defined by the often referenced Howey test (a transaction qualification test for investment contract), which was established by the U.S. Supreme Court in 1946, they fail. It calls for more, not decreased, interaction between the Securities and Exchange Commission and the bitcoin sector.
Compiled by Coinbold