• The US Supreme Court’s recent ruling on student debt cancellation is being used by Coinbase as part of its defense against charges from the SEC.
• The exchange believes that the SEC is trying to “exercise extraordinary wholesale power” over the crypto industry and has exceeded its authority.
• Lawmakers are considering a range of digital asset laws, with some favoring CFTC regulatory authority rather than that of the SEC.
Coinbase Argues Biden Student Loans Ruling Aids Defense Against SEC
The Securities and Exchange Commission (SEC) recently charged Coinbase with breaching federal securities law for operating an unregistered securities venue. Coinbase believes that this lawsuit represents an attempt by the regulator to exercise “extraordinary wholesale power” over the $1 trillion digital asset industry, thus exceeding its authority. To support its argument, Coinbase cites a U.S. Supreme Court judgment on student debt cancellation from June 30th, just days after it sent its opening defense.
Biden v Nebraska
In this case, judges ruled that government agencies need clear support from Congress if taking a decision of major economic or political significance; they found that the Secretary of Education had overstepped his authority by canceling around $430 billion in student debt. Coinbase argues that since lawmakers haven’t yet set out clear rules for cryptocurrencies, their lack of clarification amounts to a de facto prohibition on action from regulators such as the SEC without express congressional authorization – something which has not been provided in this case.
U.S. lawmakers are currently considering various pieces of legislation related to digital assets and cryptocurrencies, including a bipartisan bill proposed by Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.). This bill seeks to grant regulatory authority over cryptocurrencies to the Commodity Futures Trading Commission (CFTC) rather than the SEC., though other proposals exist as well which could potentially come into play in future rulings involving crypto exchanges like Coinbase – or even supersede them entirely depending on how legislation ultimately plays out.
The SEC has argued that certain tokens such as those tied to Solana (SOL), Cardano (ADA), and Polygon (MATIC) constitute regulated securities under current legal frameworks; they allege that Coinbase knowingly violated these frameworks when failing to register activities involving these tokens as required by law – similar allegations have also been made against rivals Binance and Bittrex .
Ultimately, whether or not Coinbase can use Biden v Nebraska as precedent in defending itself against charges from the SEC remains unclear at present – however it is undeniable that legislative developments regarding digital assets will be key in determining how U.S.-based exchanges are able operate moving forward into 2021 and beyond..