Coinbase Files for Amicus Brief in Support of Ripple
- The exchange argues that the SEC failed to provide a “fair notice” that selling XRP was illegal, and that it previously made public statements that those transactions were lawful.
- Coinbase also pointed out that the SEC is yet to provide clear guidance to crypto businesses, and that it keeps being inconsistent about its enforcement approach.
Coinbase CEO Brian Armstrong at Vanity Fair’s New Establishment Summit, October 2019.Vanity Fair
Popular cryptocurrency exchange Coinbase has requested permission to file an amicus brief in the ongoing lawsuit between Ripple Labs and the U.S. Securities and Exchange Commission, the company’s chief legal officer Paul Grewal said via Twitter on 31 October.
According to the announcement, Coinbase has asked the presiding judge for permission to file a amicus curiae brief — a legal document containing advice or information to a court case from a third-party not involved in the case — in connection to the Ripple lawsuit. If approved, the information provided by Coinbase will be taken into account before the court makes its final decision on the case. Grewal tweeted:
Coinbase’s document highlights that there is a fundamental protection under the U.S. Constitution stating that government agencies must first give a “fair notice” that a conduct is in violation of law before taking enforcement actions. It argues that the SEC had lost sight of this fundamental principle when it started suing sellers of XRP tokens after it made “public statements signaling that those transactions were lawful”.
The exchange points out that the SEC had allowed XRP to be traded for years before taking legal action against Ripple, and urged the court to deny the SEC’s request for summary judgment. It further argues that the regulator has still not provided clear guidance to businesses, and that it keeps being inconsistent about its enforcement approach, creating uncertainty for companies in the sector. Coinbase’s brief reads:
“The absence of formal rulemaking has led to unexpected enforcement actions like this one that create market uncertainty and profoundly disadvantage U.S. trading platforms like Coinbase as they compete with offshore platforms in jurisdictions where there is no risk of regulatory enforcement surprise.”
The exchange is not the first to request approval for an amicus brief, with crypto advocacy group Blockchain Association filing for the same motion last week. The group had made the same argument as Coinbase — that the SEC has failed to provide clear regulation for a fast-growing industry — and that it was disregarding Supreme Court and Second Circuit precedents, which clearly state that transactions abroad are beyond the jurisdictional reach of the regulator.
- Initially launched in the U.S., U.K., Germany, and Ireland, Coinbase One offers its subscribers zero-fee trading, improved staking rewards, 24/7 customer support, and more.
- The $29.99 per month service also offers additional benefits through Coinbase’s partnerships, and will be rolled out to 31 additional countries in the coming months.
Coinbase CEO Brian Armstrong speaking at TechCrunch Disrupt SF 2018. Steve Jennings/Getty Images for TechCrunch
- These documents are seen as central in Ripple’s battle against the SEC, which in 2020 accused the company of selling its XRP token without registering it as a security.
- The documents in question are internal emails, text messages, and expert reports that followed Hinman’s 2018 speech, in which he said ETH and BTC were not securities.
- The U.S. SEC claimed in its response that it was under no obligation to issue new regulations for crypto, and that rules for crypto were already published and were sufficient.
- The agency also tried to distance itself from any public comments made by its chair Gary Gensler, particularly regarding his statement that most cryptocurrencies are securities.