The U.S. Securities and Exchange Commission (SEC) asked the court to dismiss exchange Coinbase’s motion to dismiss the regulator’s lawsuit against it, faulting the crypto exchange’s arguments against the allegations.
In a filing with the U.S. District Court in the Southern District of New York, the SEC asked that the court deny Coinbase’s motion for pretrial judgment – a motion that calls for the judge to rule on the case based on the facts at hand before it goes to trial.
Regulators at the SEC said that its original complaint against Coinbase sufficiently makes the case for the charges against Coinbase, which include “well-pleaded” allegations that the exchange operated as a broker through its wallet application and that the crypto assets in question were, in fact, securities.
In its motion for pre-trial judgment, lawyers for Coinbase argued that the SEC overstepped its regulatory power, but the SEC argues that this claim was “backwards” and that the exchange failed to provide support for its assertion.
The SEC also pointed to a judgment made by Judge Jed Rakoff, in his denial of Terraform Labs’ motion to dismiss the SEC’s lawsuit, which stated that defendants cannot use the application of the major questions doctrine as “a tool to disrupt the routine work that Congress expects the SEC…to perform.”
The major questions doctrine is a principle of statutory interpretation in administrative law which states that courts will presume that Congress does not delegate to executive agencies issues of major political or economic significance.
However, the SEC claims that even if the major questions doctrine were applicable in this case, the circumstances warranting its application are invalid in this situation.
“That is because the Commission has ‘clear congressional authorization’ to enforce federal securities laws,” said the SEC.