Cryptocurrencies Sold by Coinbase do not represent Securities, says US court

The United States Court of Appeals for the Second Circuit issued a verdict that could have broad regulatory implications for the world of cryptocurrencies.

According to a court document, Coinbase, the second largest exchange in the market, is not violating the Securities Exchange Law of that country . Specifically, in relation to the cryptocurrencies it trades.

The case originated with citizens Louis Oberlander, Christopher Underwood and Henry Rodríguez as plaintiffs. These individuals accused Coinbase of violating federal and state securities laws in their specific cryptocurrency transactions.

The plaintiffs alleged that Coinbase was offering and selling unregistered securities. But it was an accusation that the court did not consider valid in this particular case.

The plaintiffs' claims were based on key sections of the Securities Act of 1933 and the Securities Exchange Act of 1934, both at the federal and state levels in California, Florida and New Jersey.
The scope of individuals affected by this dispute includes those who transacted tokens on Coinbase platforms between specific dates.

Based on Coinbase User Agreements

The court's decision was largely based on the interpretation of Coinbase's user agreements, which have undergone changes over time. This variation in contract language complicated the critical title and privacy issues in the case.
In response to the court's decision, Coinbase Chief Legal Officer Paul

Grewal expressed satisfaction at the dismissal of some claims. According to him, this shows that there is no private liability for secondary trading of digital assets on platforms like Coinbase, emphasizing the importance of contracts in these legal matters.

However, this verdict does not completely resolve Coinbase's legal conflicts, especially its confrontation with the United States Securities and Exchange Commission (SEC). This conflict is crucial given its potential influence on future regulation of cryptocurrencies and the industry in general.

Uncertainty over the regulation of crypto asset exchanges and other companies in the sector has been a persistent concern. This judgment is therefore expected to serve as a catalyst for regulators to work on a clearer and stronger regulatory framework, which could be beneficial for everyone involved in the cryptocurrency ecosystem.