Coinbase, the popular cryptocurrency exchange, is engaged in an ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). In a recent legal filing on Wednesday, Coinbase’s lawyers claimed that the regulator exceeded its jurisdiction by targeting the exchange without proper support from Congress.
To support their argument, the lawyers referenced a Supreme Court case, Biden v. Nebraska, where the court struck down a Biden administration plan to forgive hundreds of billions of dollars in student debt for millions of Americans. The Supreme Court ruled that the government lacked the necessary support from Congress for a decision with high political or economic impact.
Drawing on this precedent, Coinbase’s lawyers assert that the SEC should have obtained congressional support before pursuing enforcement actions against the crypto industry, which is valued at over $1 trillion.
Last month, the SEC filed lawsuits against Coinbase and Binance, the two largest cryptocurrency exchanges, alleging violations of securities laws. These lawsuits are part of a series of high-profile actions taken by the SEC against various crypto companies in recent months.
In Wednesday’s filing, Coinbase’s lawyers argue that their defense is rooted in the SEC’s decision to exert new regulatory authority over digital asset platforms through retroactive enforcement actions rather than the usual process of notice-and-comment rulemaking. They maintain that their defense is firmly grounded in both fact and law.
The outcome of this legal battle between Coinbase and the SEC will have significant implications for the regulation of the cryptocurrency industry and the extent of the SEC’s authority in overseeing digital assets.
