The US SEC on Tuesday asked a federal judge to deny a motion by Coinbase Global to dismiss the cryptocurrency exchange's lawsuit.
The agency said Coinbase was wrong to relie on a recent court ruling that found that cryptocurrency developer Ripple Labs Inc didn't violate federal securities law by selling its XRP token on public exchanges, describing a second ruling in the case of Terraform Labs that rejected the court's reasoning.
Tuesday's filing revealed that the SEC is seizing on the ruling by Terraform Labs to raise questions about the decision in the Ripple case, which the cryptocurrency industry had hailed as a victory.
In June, the SEC filed suit against Coinbase, alleging that it illegally operates as a national securities exchange, broker and clearing agency without registering with the regulatory authorities.
In August, Coinbase asked a federal court in Manhattan to dismiss the case despite the SEC's authority to pursue its lawsuit because the digital assets and services at issue did not qualify as securities.