An assembly of North American securities regulators has taken a firm stance against any notion of “special treatment” for digital assets in the ongoing case involving Coinbase (NASDAQ:COIN). They assert that actions taken against Coinbase should be regarded as neither groundbreaking nor extraordinary.
In a filing dated October 10 and submitted to the United States District Court for the Southern District of New York, the North American Securities Administrators Association (NASAA) firmly aligned with the U.S. Securities and Exchange Commission (SEC). The NASAA’s argument centers on the premise that applying securities laws should treat digital assets no differently than traditional assets.
The SEC has previously taken Coinbase to court, accusing the publicly traded cryptocurrency exchange of violating federal securities laws. In response, Coinbase contended that the digital assets and services it provides should not be classified as securities, challenging the regulatory authority of the SEC.
Vincente Martinez, General Counsel of the NASAA, emphasized that the SEC’s position in this matter is neither unconventional nor exceptional. Martinez highlighted the alignment of the SEC’s stance with its longstanding public positions, asserting that it adheres to established legal norms.
At the core of the lawsuit lies the interpretation of the Howey test, a pivotal criterion for determining the classification of an investment contract. Coinbase has argued that digital assets fail to satisfy all aspects of this test.
Martinez countered Coinbase’s stance, stating that the Howey test is inherently flexible and adaptable, designed to encompass technological advancements within the securities market, including assets transacted on blockchain networks. This argument closely mirrors earlier statements made by the SEC.
Martinez emphatically conveyed that the court should reject Coinbase’s attempt to restrict and misapply established legal frameworks to evade regulatory obligations. He underscored that digital assets should not be regarded as “special” in this context.
The NASAA’s submission lends its support to the SEC’s position, urging the court to dismiss Coinbase’s efforts to have the lawsuit thrown out.
Comprising 68 members, including securities regulators from all 50 U.S. states and entities from Canada, Mexico, and various U.S. territories, the NASAA maintains a significant interest in the case. Martinez emphasized the considerable stake held by NASAA and its members in this ongoing legal dispute.
