If not for Federal Judge Analisa Torres, Coinbase’s first pre-trial hearing in its battle against the Securities and Exchange Commission might have garnered more attention.
But Torres—who sits in the same Southern District of New York where Coinbase’s SEC case will be heard—stole the spotlight when she issued a partial ruling on the SEC v. Ripple Labs case Thursday morning.
“The court ruled that Ripple’s XRP sales through digital asset exchanges are not securities transactions,” Coinbase Chief Legal Officer Paul Grewal told Decrypt in a written statement. “The relevant aspects of those XRP sales operate the same way the majority of digital asset trading operates on exchanges like Coinbase.”
gm: Coinbase's Top Lawyer Gets Real on SEC
Paul Grewal is the Chief Legal Officer at Coinbase and a former U.S. magistrate judge in Northern California. He gave Dan Roberts and Stacy Elliott his candid takes on Sam Bankman-Fried and FTX, the SEC's crackdown on staking, the sanctioning of Tornado Cash, and more alpha on how Coinbase is approaching the current unfriendly US regulatory environment. Watch and make sure to subscribe to the gm podcast on Apple or Spotify.
And that has cast doubt on some of the allegations Coinbase faces in its own court battle against the SEC, a person familiar with the case told Decrypt.
“So the court ruling—this thing blows a hole in the entire theory of the SEC when it comes to claims like the ones they've made against Coinbase,” the person said. “And, you know, I get it. It's one judge. It's one case. A different judge might think differently. This thing is gonna have a massive effect.”
Coinbase only just had its first pre-trial hearing this morning for its court battle with the SEC. Last month the U.S. securities regulator alleged the San Francisco-based crypto exchange should have registered as an exchange, clearing house, and broker and that it sold unregistered securities through its staking service.
Why Coinbase Thinks the SEC Lawsuit Should Be Dismissed
Crypto exchange Coinbase has filed a motion to dismiss the Securities and Exchange Commission's (SEC) case against it for violating securities laws and operating as an unregistered entity. In its filing, Coinbase argues that the SEC does not have statutory authority over the exchange, and that its position regarding its powers is “untenable as a matter of law.” The exchange filed the 177-page, 11-point defense motion on June 28. Paul Grewal, the Chief Legal Officer at Coinbase, tweeted this morn...
But now that a federal judge has ruled that in most cases XRP was not sold as a security, Coinbase has reversed its January 2021 decision to “fully suspend trading in XRP."
On Thursday, Coinbase said it would again allow XRP trading on its exchange.
“Our XRP-USDT and XRP-EUR trading pairs are now in full-trading mode on Coinbase Exchange, Coinbase Pro and Advanced Trade,” the company wrote from one of its Twitter accounts just before 9 p.m. EST on Thursday. “Limit, market and stop orders are all now available.”
Per data from CoinGecko, XRP is now the industry's fourth-largest cryptocurrency by market capitalization, having risen nearly 67% over the past 24 hours. It's currently trading hands at $0.78.
