Controversial public figure Edward Snowden has warned that the U.S. SEC will lose hard in its ongoing case against Coinbase.
On Wednesday, a United States district judge ruled that the Securities and Exchange Commission (SEC) can proceed with its lawsuit against Coinbase.
Judge Katherine Failla denied Coinbase’s motion to dismiss the case, arguing that the SEC has provided sufficient evidence that the exchange may be violating securities laws with its trading and staking products. This will give SEC the opportunity to prove its case.
While the ruling evidently goes against Coinbase at this stage, the exchange has claimed that it anticipated the decision. Coinbase will contest the lawsuit, with chief legal officer Paul Grewal expressing confidence in the company’s legal arguments.
Meanwhile, the crypto community has rallied around Coinbase, with Edward Snowden leading the voices in favor of a Coinbase victory at the end. In fact, Snowden noted that the court’s decision to advance the SEC’s case “does not bother” him.
Instead, he anticipates a similar outcome as that which played out between the SEC and Grayscale last year. Recall that in August 2023, a U.S. court ruled against the SEC, paving the way for the regulator to approve spot Bitcoin ETFs earlier this year.
Snowden notes that if the SEC continues to act in “bad faith,” then it will eventually lose so hard in court that it will no longer have the chance to pursue enforcement against crypto-related entities. For the record, the SEC currently also has legal cases against Binance and Kraken.
This doesn't bother me. If the SEC keeps acting in bad faith like this, they're going to lose so hard in court that they'll never be able to do this to anyone ever again. Remember when the SEC got spanked so badly that Gensler had to approve BTC ETFs with tears in his eyes? yeah https://t.co/XWOwmoaICN
— Edward Snowden (@Snowden) March 27, 2024
Coinbase Wins on Self-Custody Wallet Front
While most of the SEC’s allegations against Coinbase will proceed, the exchange scored a victory on one front. The SEC had claimed that Coinbase serves as an unregistered broker by enabling customers to access its Coinbase Wallet application.
In the court ruling, Judge Failla dismissed the SEC’s claim, denying any opportunity for the SEC to bring a case against Coinbase for offering that option to users. Meanwhile, both parties have until April 19 to provide a “proposed case management plan,” which will allow the case to move forward.