U.Today - , the largest U.S. digital asset exchange, has filed a motion to dismiss the U.S. Securities and Exchange Commission (SEC) lawsuit against it, according to a tweet by Paul Grewal, the company's chief legal officer.
The SEC's case alleges that Coinbase (NASDAQ:COIN) should have registered as a securities exchange, broker and clearing agency under federal securities laws, an accusation the firm strongly disputes.
Grewal stated in the tweet, "We welcome dialogue any time with any regulator, including the SEC, and believe new legislation and rulemaking is the right path forward. But the claims in this case go far beyond existing law – and should be dismissed."
In the motion, Coinbase argues that the SEC's position is inconsistent and goes against previous understandings between the two entities.
The exchange claims that when the SEC approved its registration statement back in 2021, there was no suggestion that Coinbase had to register its operations.
has now brought an action against Coinbase for failure to register since 2019, alleging that 12 out of the over 240 tokens traded on the platform are securities.
Coinbase asserts that the SEC's reversal is not due to any material changes in Coinbase's business or new information, nor is it a product of legislative change; rather, it is solely a change in the SEC's stance.
The motion also contends that the SEC's claim is "untenable as a matter of law" and violates due process and the constitutional separation of powers.
Coinbase cites SEC Chair Gary Gensler's May 2021 testimony to Congress that the Commission lacked statutory authority to regulate businesses like Coinbase, adding that the SEC has overstepped its powers.
According to the motion, none of the assets the SEC now identifies as securities are indeed securities, and the transactions are not securities transactions.