Exciting news from Coinbase to crypto investors!

Coinbase has filed a petition to dismiss the Securities and Exchange Commission (SEC) lawsuit, in which the Commision accused the company of illegally operating an unregistered securities exchange, broker, and clearing agent.

Coinbase claims the SEC has no authority over its operations, as it does not deal with securities.

Paul Grewal, chief legal officer of Coinbase, wrote in a series of tweets;

Our core argument is simple — we do not offer “investment contracts” as that term has been construed by decades of Supreme Court and other binding precedent. By ignoring that precedent, the SEC has violated due process, abused its discretion, and abandoned its own earlier interpretations of the securities laws. By ignoring that precedent, the SEC has trampled the strict boundaries on its basic authority set by Congress.

As you remember, The SEC filed the lawsuit in June, saying Coinbase has raised billions of dollars since at least 2019 by “illegally facilitating the trading of crypto-asset securities.”

Coinbase cited a separate SEC lawsuit in its dismissal move. A judge ruled in July that Ripple Labs’ XRP is not considered a security when sold on exchanges (although institutional sales of XRP are covered by securities regulations).

However, this precedent may not work in Coinbase’s favor. A different judge this week disagreed with the Ripple decision, saying the SEC could file a lawsuit against Terraform Labs and its CEO, Do Kwon. This includes claims of involving sales on exchanges and billions of dollars in fraud. As Bloomberg points out, neither the Ripple nor the Terraform lawsuit sets a controlling precedent in the Coinbase lawsuit.

Interestingly, Coinbase argues that the cryptocurrencies sold on its platform are more like baseball cards than securities. It turns out that baseball cards are goods that people buy and sell in hopes of increasing their value.