Coinbase, the leading cryptocurrency exchange in the United States, has adopted a legal argument previously put forth by Ripple in its ongoing battle against the Securities and Exchange Commission (SEC). Legal expert Jeremy Hogan, who has closely followed the Ripple-SEC case, took to Twitter to highlight the resemblance between Coinbase’s recent court filing and Ripple’s defense.
Coinbase recently submitted a 117-page petition requesting the dismissal of the SEC’s lawsuit, which accuses the exchange of operating as an unregistered securities exchange. The SEC alleges that Coinbase should have registered as a securities broker and a clearing agency, particularly for altcoins that the regulator deems as securities. Coinbase contends that the SEC did not explicitly require it to register its business when it was established in 2021.
Notably, Coinbase’s court filing includes references to the “Hinman emails,” a collection of internal communications within the SEC that gained attention during the Ripple lawsuit. These emails suggest that high-ranking SEC officials expressed uncertainty regarding the regulatory status of cryptocurrencies such as Ripple’s XRP.
Coinbase’s incorporation of the Hinman emails in its defense indicates a strategic alignment with Ripple’s argument that the lack of regulatory clarity contributed to their alleged non-compliance.
It is worth mentioning that Coinbase was among the first cryptocurrency exchanges to suspend XRP trading when the SEC initiated legal action against Ripple in December 2020. However, Coinbase itself has not been spared from the SEC’s scrutiny and has faced its own lawsuit over allegations of securities violations.
Meanwhile, Ripple continues to rally support within the financial and fintech sectors. Major institutions and industry giants, including Mastercard, Amazon Web Services, the Bank of Finland, PwC, and the Bank for International Settlements, have announced their partnership with Ripple, joining the company’s blockchain initiative. Ripple aims to boost the development of Central Bank Digital Currency (CBDC)-related applications through its revived CBDC Innovate Challenge.
The CBDC Innovate Challenge calls upon developers to create applications for state-backed digital currencies, commonly known as CBDCs. Ripple will provide its cutting-edge technology, including its proprietary CBDC platform, as the foundation for all applications. The competition promises substantial prizes sponsored by Ripple Labs, further incentivizing developers to explore the potential of CBDCs and their real-world applications.
As the legal battles between Ripple and the SEC unfold, Coinbase’s adoption of Ripple’s legal strategy adds a new twist to the crypto regulatory landscape. The outcome of these cases will likely have far-reaching implications for the broader cryptocurrency industry, as it seeks clearer guidelines and regulatory certainty moving forward.
