In a recent interview with Thinking Crypto, Faryar Shirzad, Chief Policy Officer at Coinbase, shed light on the ongoing legal battle between the cryptocurrency exchange giant and the U.S. Securities and Exchange Commission (SEC). Shirzad discussed key aspects of the lawsuit, Coinbase’s stance, and its hopes for a favorable resolution.
Coinbase’s Strong Defense
Shirzad emphasized Coinbase’s commitment to defending its position in the SEC lawsuit. He revealed that Coinbase has enlisted the support of external legal counsel who share their conviction in the case, making their defense robust.
The Token-As-Security Debate
One of the central arguments made by Coinbase is that for a cryptocurrency token to be classified as a security, there must be a contractual relationship with certain representations and undertakings between the seller and buyer. In Coinbase’s case, Shirzad highlighted that there’s no direct connection or privity between the token developer and the buyer, as Coinbase primarily operates as an exchange and secondary market. Therefore, Coinbase contends that it does not meet the criteria for being considered a security.
Awaiting the Judge’s Decision
Shirzad acknowledged that the ultimate decision lies with the judge, who recently announced oral arguments scheduled for January. He expressed optimism about Coinbase’s position but acknowledged the need to wait for the judge’s ruling.
He said, “We’re pushing aggressively. I feel good about where we’re going to land, but you know, we’ll have to see what the judge decides.”
Concerns Over SEC’s Broad Interpretation
Shirzad also raised concerns about the SEC’s expansive theory that any sale for profit could potentially be classified as a security, drawing parallels to purchases of property, collectibles, or commodities. He argued that such an interpretation would be impractical and overly broad. Coinbase’s stance remains firm, awaiting clarity from the judge’s decision.
Hopes for a Bitcoin ETF
Touching on a Bitcoin exchange-traded fund (ETF), Shirzad referred to a recent court decision in the Grayscale case, where the court found the SEC’s actions to be “arbitrary and capricious.” He suggested these findings could serve as a roadmap for the SEC’s decision on Bitcoin ETFs. While he couldn’t predict the exact timing, he hoped the SEC would issue a decision soon and approve Bitcoin ETF applications.
Coinbase’s ongoing legal battle with the SEC continues to draw attention in the cryptocurrency industry, with Coinbase’s leadership expressing confidence in their case and the hope for a swift resolution.