One of the precedent-setting lawsuits for the digital assets industry, the Coinbase vs. US Securities and Exchange Commission (SEC) case, is expected to be paused. The prospective ruling follows a similar resolution in the Binance’s case with the financial regulator.
A key deadline looms for the US SEC to decide whether digital assets on Coinbase qualify as securities. Judge Katherine Polk Failla had allowed the US’s biggest crypto exchange to appeal and let the Second Circuit Court weigh in on the matter.
The court’s ruling on Friday is expected to define or even foster hope on whether existing securities laws apply to crypto in the US.
Is the SEC preparing to change its stance?
Eleanor Terrett, a Fox Business journalist, suggested in a post that Coinbase is stuck in a unique situation in comparison to other crypto firms facing the regulatory heat. All eyes are on the February 14 deadline when the commission will respond on the backdrop of the new regulatory science under the Trump administration.
She mentioned that the commission can either oppose Coinbase’s request for appeal or choose not to oppose it. However, the SEC going against the appeal would imply that the regulator plans to rework its arguments.
This decision under the acting chair Mark Uyeda might look similar to what Gensler believed in about the application of securities laws to most cryptos. She added that Uyeda and Hester Peirce have both said the law in this area has not been clear.
If the SEC chooses not to oppose Coinbase’s request for appeal, then it would suggest that the commission wants to resolve the issue of how securities laws apply to crypto. Terret highlighted that this matter is currently being addressed in the crypto task force.
Trump-era SEC shakeup
There are still other options available for the watchdog, where it can ask for an extension of the deadline or choose not to proceed and drop the case. The commission’s next step will reveal many aspects in terms of how it is planning to handle ongoing litigation of cases disputing securities law.
Earlier, the SEC submitted its first request to pause crypto litigation in the courts after Uyeda stepped in. Binance and the regulator filed a joint motion to put a stay on the case against the exchange for 60 days. It cited that the work of this task force may impact and facilitate the potential resolution of this case. In the granted pause period, both parties will plan to issue a joint status report to see whether a continuation of the stay is warranted.
After Binance and Coinbase fillings, the industry is expecting similar things in Ripple, Kraken, and other crypto cases.
The global crypto market is witnessing a continuous decline after Donald Trump entered the White House. The cumulative crypto market cap dropped by over 2% in the last 24 hours to stand at $3.16 trillion with a trading volume of $100 billion. The Fear and Greed index is still flashing the “Fear” sentiments among the traders.
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