An unfinished battle: Coinbase vs SEC

Stuart Alderoty, Ripple’s chief legal officer, has expressed his belief that Coinbase’s ongoing legal battle with the US Securities and Exchange Commission (SEC) is far from over. He suggests that while a swift resolution would have been ideal, the wheels of justice often move slowly, and he remains confident that the outcome will eventually favour the righteous.

Alderoty further elaborates that the court’s decision to give the regulator “the benefit of doubt” at this early stage is not indicative of the final outcome. This perspective comes in the wake of Coinbase’s failed motion to dismiss the SEC’s lawsuit.

Despite this setback, Paul Grewal, Coinbase’s top attorney, remains undeterred. He asserts that his company will now focus on uncovering more information about the SEC’s stance on cryptocurrency regulation during the discovery phase. “We look forward to proving we’re right, we are eager for the opportunity to take discovery from the SEC for the first time,” Grewal added.

Glimpse into the future

Coinbase CEO Brian Armstrong echoes this sentiment, stating that his company will continue its fight. He views the ruling by U.S. District Court Judge Katherine Polk Failla, which dismissed the SEC’s claims about Coinbase’s Wallet app acting as an unregistered broker, as a significant victory for self-custodial wallets.

However, it’s worth noting that despite Coinbase and its supporters’ efforts to downplay the recent setback, the exchange was initially expected to win this motion. Bloomberg analyst Elliot Stein had estimated a 70 percent chance that the judge would dismiss the lawsuit.

Now, Coinbase faces a prolonged and costly legal battle against the SEC, which has resulted in a nearly 4 percent drop in the company’s stock this Wednesday. Meanwhile, Ripple, despite achieving a partial victory against the SEC last year, is now grappling with a staggering $2 billion in penalties and fines.