In an Oct. 24 put up on X (previously Twitter), Paul Grewal, the Chief Authorized Officer at Coinbase, stated SEC’s actions replicate an try to keep up oversight over each “safety” and “contract” with none limiting parameters.

“By arguing that any buy during which the client hopes for a rise in worth constitutes an funding contract-and subsequently a security-the SEC is trying a radical growth of its personal authority. Solely Congress can try this as the key questions doctrine makes clear,” Grewal added.

Coinbase’s argument

In its submission, Coinbase clarified that not each monetary transaction with revenue potential must be thought of a safety and emphasised that the SEC’s jurisdiction was restricted to securities transactions alone.

“Funding contracts grant the purchaser a contractual declare associated to the longer term revenue, income, or belongings of a enterprise enterprise. That’s what makes them securities reasonably than simply investments.”

The change additionally furthered that its staking program doesn’t qualify as a safety as a result of the “IT outsourcing companies provided contain neither an funding of cash by prospects nor managerial efforts by Coinbase.”

It added:

“Have been the SEC’s place accepted, numerous software-driven companies could be securities. That may be one other radical growth of SEC authority with no grounding in precedent.”

Coinbase and the SEC have been concerned in a drawn-out authorized battle over the previous yr over crypto rules. The regulator had filed related lawsuits in opposition to main crypto exchanges, together with Binance, in June.