Summary
A New York judge could potentially dismiss the case brought by the Securities and Exchange Commission (SEC) against Coinbase. The judge, Katherine Polk Failla, posed challenging questions to both the SEC and Coinbase during oral arguments. Bloomberg Intelligence senior litigation analyst Elliott Stein believes there is a 70% chance that Coinbase will beat the SEC in this case. Judge Failla expressed skepticism regarding the SEC’s theory on what constitutes securities, which could potentially lead to a dismissal. However, if the judge denies Coinbase’s motion, the case will proceed to discovery and potentially trial. The outcome of this case could have significant implications for the crypto industry. Meanwhile, Binance is also facing a lawsuit by the SEC, and the judge overseeing that case, Amy Berman Jackson, may dismiss certain claims against the exchange. Both judges are taking the arguments presented by the defendants seriously, and it is possible for both Coinbase and Binance to be dismissed or have certain claims dismissed. The outcome of these cases may eventually reach the Supreme Court.
Key Points
1. Experts have mixed feelings on the chance that a New York judge could dismiss the case brought by the SEC against Coinbase. The judge, Katherine Polk Failla, posed tough questions to both parties during oral arguments, expressing concern about the SEC’s definition of securities.
2. Bloomberg Intelligence senior litigation analyst Elliott Stein believes Coinbase has a 70% chance of beating the SEC. He argues that even if the case survives, it is likely to reach the Supreme Court, which could potentially narrow the SEC’s interpretation of securities.
3. However, others believe that the case will not be dismissed at this stage. If the judge denies Coinbase’s motion, the case will proceed to discovery and potentially to trial, which may not occur until 2025. The SEC only needs to plead a claim strong enough to proceed to discovery, so the bar is relatively low.