U.S. District Judge Katherine Polk Failla has rejected Coinbase’s request to dismiss the SEC’s lawsuit, meaning the exchange will now face a lengthy legal battle similar to Ripple’s. The judge ruled against most of Coinbase’s arguments and stated that the SEC had a credible case against the San Francisco-based company. She also determined that Coinbase had acted as an unregistered broker, exchange, and clearinghouse, and facilitated the trading of unregistered securities through its staking program. However, the court did dismiss the SEC’s allegation against Coinbase Wallet. This ruling means that the SEC lawsuit against Coinbase will proceed to discovery, and experts believe the exchange could face a similar fate to Ripple, which has been battling the SEC for over three years. In December 2020, the SEC charged Ripple with violating securities laws, but the court recently ruled in favor of Ripple on some issues. The Ripple case has now entered the remedies phase, and the SEC has submitted an opening brief. Meanwhile, crypto enthusiasts expected the Coinbase lawsuit to progress to discovery, as the SEC did not need a strong argument to convince the judge to deny Coinbase’s motion to dismiss. Despite this setback, Coinbase will now have the opportunity to present its case in court, just as Ripple has done.
