Coinbase Seeks Dismissal Of SEC Lawsuit; Digital Chamber Advocates Against AML Bill

Coinbase seeks dismissal

Cryptocurrency exchange Coinbase asked a judge to dismiss the SEC’s lawsuit against the company on Friday. The company’s Chief Legal Officer Paul Grewal said in a Tweet thread, “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.” Therefore, the suit is baseless, reasons the Company. See the dismissal request (PDF).

Coinbase seeks dismissal – reaction

Jason Gottlieb, a partner and digital assets chair with law firm Morrison Cohen, complimented the company’s brief on Twitter, and argued that the Securities and Exchange Commission (SEC) has overreached. Gottlieb made note of the use of the “Major Questions Doctrine” (MQD) in Coinbase’s motion to dismiss tweeting the company could have gone even further in its argument.  Later, Gottlieb argues, “As everything is becoming digitized, this fight isn’t just about cryptocurrency. It’s a much larger battle for the right to your digital life — and whether the Securities and Exchange Commission is the proper regulator for the entire digital economy.”

Digital assets are at the forefront of regulating and integrating technology into U.S. government and its policies today.

Also chiming in on the latest court action, Willkie crypto lawyer Mike Selig tweeted that Coinbase’s “motion to dismiss advances a strong argument that ‘contract, transaction or scheme’ under Howey means a contractual undertaking to deliver value at a later date (whether in a standalone contract or as a component of a transaction or scheme). Crypto assets aren’t contracts.”

more tips:

The Major Questions Doctrine (Nov. 2022) – Congressional Research Service

Bitcoin mayor for president

On Friday, Miami mayor and Republican presidential candidate Frances Suarez announced on CoinDesk TV that his campaign will be receiving donations in Bitcoin. He also said he’d ban a Central Bank Digital Currency (CBDC) if he became president. Finally, he decried the SEC’s approach to crypto saying, “The biggest mistake that this administration has made is they don’t understand crypto, so they have gone to a regulated-by-enforcement mechanism as opposed to set the ground rules. You have to be able to classify certain digital products, you have to be able to have certain guidelines and rules that are clear with respect to the custody of assets.” Read more.

Suarez may be a longshot, but if a Republican were to win the presidency, he could potentially be in line for a significant role in the new administration, where his pro-crypto stance might steer certain parts of the government toward a more supportive stance when it comes to digital assets and blockchain technology.

“call your Senator”

The Chamber of Digital Commerce, a blockchain industry advocacy organization, makes its case on why July 27’s re-introduction of the Digital Asset Anti-Money Laundering Act led by Senators Elizabeth Warren (D, MA) and Roger Marshall (R, KS) is a potentially crippling step against the digital assets industry.

Urging industry participants to call their Senator, The Digital Chamber admits that the Act is unlikely to make it out of the Senate but remains wary saying, “The legislation would classify certain industry participants, including individual miners and validators, as financial institutions subject to the Bank Secrecy Act compliance regime. Treating these entities commensurate with the largest banks, hedge funds, and money transmitters would weigh them down with unnecessary compliance, stifle innovation, hinder industry growth, and force activity offshore to jurisdictions with less adequate security and oversight.” Read the argument.

stablecoin interest

In perhaps a sign of the current “crypto winter,” the latest Coinbase quarterly report showed the volatility of interest revenue for stablecoins – specifically, USDC, a stablecoin issued by Circle. The WSJ wrote on Friday: “[USDC] revenue had jumped sharply in recent quarters. But a 28% decrease in average USDC market cap in the second quarter helped drive a 16% quarter-over-quarter drop in interest income, to $201 million.” Volatility in the banking sector in March, such as the bankruptcy of Silicon Valley Bank (SVB), didn’t help either. Read more.

more tips:

Coinbase Seeks to ‘Optimize’ Amid Bitcoin Bear Market, Beats Earnings Expectations – Decrypt

MiCA Prague

As the European continent’s Markets-in-Crypto-Assets (MiCA) framework is rolled out, Prague is becoming a hub for crypto development and advocacy reports CNBC. “It helps that Prague has a long track record of drawing the sector’s top talent. The Czech capital is home to the world’s first hardware wallet and the first bitcoin mining pool. Bitcoin is accepted in Alza, one of the largest retail chains in the country, as well as in hundreds of other smaller businesses,” says CNBC’s MacKenzie Sigalos. Read it.

crypto walls 

It may have less than 1% of its crypto customers in the United States, but fintech firm Revolut’s decision to shutdown crypto services to U.S. users last week is a stark reminder of the steady growth of walls being built around the U.S. economy – whether you’re pro- or anti-crypto. “If Revolut’s U.S. users don’t sell their crypto holdings before Oct. 2, the company will liquidate any remaining balance on Oct. 3,” says The Block. Read more.

see more tips

To catch fentanyl traffickers, feds dig into crypto markets – CNN Politics

Why Hong Kong could be crypto’s next ‘center of gravity’ – Blockworks

Crypto Heists Funneling Billions to North Korea’s Nuclear Program Attract Senate Scrutiny – The Wall Street Journal

Founder of bankrupt crypto lender Celsius must face New York fraud lawsuit – Reuters

Use Case: How Lingo Is Disrupting Loyalty Rewards Using Blockchain Technology – Entrepreneur APAC