SEC rules out howey to regulate crypto trading

68
1
SEC rules out howey to regulate crypto trading

In June, the SEC alleged that Coinbase, a U.S.-based company, failed to register as a securities exchange with the SEC. Coinbase has tried to get the case dismissed, asking the judge to make a pre-trial ruling that crypto changing hands isn't the same as an investment contract.

This should be ignored, the SEC said in a filing Tuesday. The court's ultimate interpretation of Who is getting the so-called Howey test right: coinbase, with its narrower opinion, or the SEC, which says Howey is meant to be flexible and widely interpreted when it defines a security that must be regulated by the SEC.

Investor contracts, and whether customers on Cryptobase's trading platform were entitled to the protections afforded by the federal securities laws that require intermediaries of securities transactions to register with the SEC.

The US securities regulator argued that just because the agency allowed Coinbase to go public wasn't an automatic endorsement that trading on that platform conformed to securities laws.

The court's ruling clarification clarification clarified the legal regime around what is and isn't an investment contract.