Ripple’s Chief Legal Officer, Stuart Alderoty, took to social media to express skepticism about the Securities and Exchange Commission’s (SEC) ability to substantiate its claims against Coinbase. He believes that the recent decision to grant the SEC’s lawsuit against Coinbase leave to go to trial poses a difficult phase for the SEC, as the latter must now provide solid evidence to substantiate its allegations.

Re-read Wed.’s Coinbase ruling. Basically, the SEC sold the Judge a bill of goods that she had to accept as true at this stage of the case. Now comes the hard part – – producing evidence. My bet: the SEC is all hat, no cattle.

— Stuart Alderoty (@s_alderoty) March 30, 2024

SEC vs. Coinbase Lawsuit

The lawsuit that was filed by the SEC against Coinbase is centered on the claim that the cryptocurrency exchange conducted unregistered sales of securities. The case entered a new phase when the judge of the federal court of Manhattan allowed the lawsuit to proceed, denying the motion to dismiss filed by Coinbase. As a consequence, the crypto market was affected, and Coinbase shares dropped slightly.

The essence of the complaint of the SEC is that through its Staking program, Coinbase had been involved in offering and selling securities without proper registration. Moreover, the SEC has also filed a connected suit in the District of Columbia against Binance, which is another crypto exchange, on the same grounds.

Discovery Phase

The next stage of the lawsuit is the discovery process, the most important period when the parties can ask for and share documents relevant to the case. This stage gives Coinbase an open window to gather information that could help defend itself from the SEC accusations. Experts from the industry have argued that this period could take a few months or longer, thus revealing important insights into the SEC’s approach and policy toward cryptocurrency regulation.

In the past, discovery phases have been decisive in lawsuits similar to the SEC’s lawsuit against Ripple. The learnings of these phases can have a pivotal effect on the way a legal battle unfolds and ultimately ends.

Comparisons with the Ripple Case

The present lawsuit is reminiscent of what the SEC has already done to Ripple in the way that discovery might play out. In the case of Ripple, the discovery process uncovered precious information regarding internal perspectives of the commission on cryptocurrencies, data that greatly contributed to the company winning the case. Observers are now making comparisons between the two cases and are suggesting that Coinbase might have a similar course.

Consequently, due to the complexity and duration of such legal battles, the litigation between the SEC and Coinbase may last for quite a long time, involving numerous legal moves such as summary judgment briefs or even interlocutory appeals.

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The post Ripple CLO Challenges SEC Claims Post Coinbase Decision appeared first on CoinGape.

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