SEC and Coinbase Will File Confidential Information in Court
The Securities and Exchange Commission (SEC) and Coinbase filed a joint request with the Southern District of New York to seal certain confidential information.
This action is sensitive given that both parties involved claim that the documents in dispute contain business information that, if disclosed, would harm their business. The lawsuit is based on the SEC’s accusations that Coinbase engaged in activities that should be covered by securities laws.
SEC and Coinbase Seek Court Approval
The motion to seal the documents was presented to Judge Katherine Polk Failla, who explained why some documents should not be made public.
The information contained in the application includes detailed financial operations, internal compliance measures and strategic business plans that are not publicly disclosed.
Disclosure of such information may lead to unfair business advantages to competitors or undesirable effects on market behavior.
The arguments presented by both the SEC and Coinbase suggest that sealing these documents is crucial to prevent serious harm to their operations while also preserving the sanctity of the investigative process. Legal advisors explained that this is common practice in situations where trade secrets may be revealed during litigation.
Background of the case
The SEC filed the first lawsuit against Coinbase in June 2023, alleging that the company was operating as an unregistered broker and exchange. Then in March, a judge allowed the SEC’s accusation that Coinbase was involved in unregistered securities sales to go to trial.
This decision was particularly beneficial to the regulator as it allowed claims to be tried by jury. That’s why earlier this month, Coinbase requested the SEC to approve a new framework for regulating cryptoasset securities, citing the fact that existing laws are poorly suited to the nature of cryptoassets.
However, this request was rejected by the SEC, which argued that existing frameworks were sufficient to address investor protection and market integrity issues. However, the regulator is going through a tough time, with the recent vote to kill the SAB 121 rule passed by the Senate and the pending vote on bills aimed at making it easier to regulate cryptocurrencies, with the SEC accused of slowing down innovation.
Also read: Spot Ethereum ETF: When is the Launch Timeline If SEC Approves?
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Kelvin is a distinguished author specializing in crypto and finance, with a bachelor’s degree in Actuarial Science. Known for her sharp analysis and insightful content, she is fluent in English and specializes in comprehensive research and on-time delivery.
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