Coinbase denies SEC claim nine Ethereum-based altcoins are securities

Coinbase denies SEC claim nine Ethereum-based altcoins are securities

Crypto exchange Coinbase has refuted claims by the U.S. Securities and Exchange Commission (SEC) that nine digital assets listed on its platform are securities.

Coinbase’s Chief Legal Officer, Paul Grewal, says The exchange, in its lawsuit against a former employee and two others accused of insider trading, dismisses the SEC’s claim that nine of its publicly traded digital assets are securities.

According to Grewal, Coinbase conducts a rigorous vetting process before listing digital assets to ensure securities are kept off the platform.

“We 100% disagree with the SEC’s claim that all crypto assets we list are securities.

Coinbase has a rigorous process to analyze and review each digital asset before it is made available on our exchange – a process that the SEC has itself reviewed.”

Coinbase’s top attorney says that although the US Department of Justice (DOJ) and the SEC are reviewing the same evidence, only the latter considers the crypto assets implicated in the insider trading case to be securities.

“We worked with both the DOJ and the SEC on this investigation. The DOJ reviewed the same facts and decided not to press securities fraud charges against those involved.”

In its insider trading case, the SEC’s complaint states that the agency believes nine Ethereum-based tokens listed on the exchange are securities. The agency points to Amp (AMP), Rally (RLY), PowerLedger (POWR), XYO Network (XYO), Rari Governance Token (RGT), LCX (LCX), DerivaDAO (DDX), DFX Finance (DFX), and Kromatika ( KROM).

“…each of the nine companies that have offered these crypto-asset securities and their promoters highlighted, among other things, their efforts to have their crypto-asset securities listed on secondary trading platforms and the critical role that executives and others play in the company played to lead the company to success and thereby increase the value of crypto asset security.

IIn other words, each of the nine companies invited people with a promise to invest in the future to increase the value of their investment.

These hallmarks of the definition of a security continue to apply to the nine crypto-asset securities that are the subject of trading in this complaint, including continued assurances from issuers and their management teams regarding the investment value of the tokens, the management efforts leading to the value of the tokens contribute and the availability of secondary markets for trading the tokens.”

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