Judge Tana Lin has issued a favorable ruling for the SEC, classifying some cryptocurrency transactions on Coinbase as securities.
Judge Tana Lin at the Western District Court of Washington has made the ruling on Friday stating that some cryptocurrency asset transactions are securities, despite being traded on Coinbase, a secondary market.
After the ruling, a Twitter user asked Paul Grewal, Chief Legal Officer (CLO) of Coinbase, under the post a few hours later.
In response to the question, the CLO posted a thread on Twitter, expressing skepticism about the ruling.
He pointed out that the judge made a statement of violation when the defendant was not given the opportunity to rebut the allegations. The result only accepted the SEC’s arguments without any opposition.
Paul emphasized that the judge only considered the SEC’s case file, ignoring any counterarguments from the defendant to refute the SEC’s evidence.
Coinbase’s CLO also criticized the SEC’s strategy of targeting defendants and absent intermediaries while avoiding issuers in similar trial sessions.
This prevents individuals with crucial information from effectively refuting the SEC’s statements.
The current lawsuit revolves around Ishan Wahi, a former Coinbase employee. When he and his brother settled the allegations with the Department of Justice and the Securities and Exchange Commission (SEC).
However, this lawsuit now targets their colleague, Sameer Ramani, who seems to have fled the United States, further intensifying the situation.
Analysts had predicted actions against Ramani, but the above ruling carries significant implications for the cryptocurrency industry.
As Coinbase argued that cryptocurrencies are not securities and therefore not under the jurisdiction of the SEC. Thus, the ruling reinforces the SEC’s enforcement campaign initiated by former chairman Jay Clayton and continues under Gensler’s leadership.
