Coinbase Defends Solana, Cardano and Other Altcoins Against SEC Lawsuit

In June 2023, the US Securities and Exchange Commission sued the crypto exchange Coinbase – a good six months later there was a hearing in court in New York. The case is being closely watched by the crypto scene because it could impact the future of major altcoins such as Solana (SOL) and Cardano (ADA).

The SEC is of the opinion that Solana, Cardano and around ten other altcoins listed by Coinbase are securities and that the crypto exchange therefore needs approval to offer purchases and sales.

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Coinbase sees it differently and believes that the SEC is exceeding its authority

The legal expert MetaLawMan, among others, was present at the court as an observer and shared his findings on X (formerly Twitter). Accordingly, Judge Katherine Polk Failla was very well prepared and carried out the five-hour hearing with concentration.

According to MetaLawMan, she understands the fundamental importance of the procedure and also cites existing judgments from SEC lawsuits such as those against Ripple (XRP). Her verdict is expected in the next three months and could be limited to reviewing the case in detail.

Coinbase General Counsel Paul Grewal also spoke up via X and thanked him for the fair conduct of the proceedings. In this matter, however, the SEC and Coinbase remain irreconcilable. After the legal defeat against Ripple and XRP, the SEC is determined to ensure that US courts follow the assessment that most well-known altcoins fall under securities laws.

This would put the future of Solana, Cardano and many other altcoins in danger in the USA. Coinbase, on the other hand, has long seen the SEC as having a duty to publish clear guidelines for the crypto industry and to obtain a political mandate for far-reaching lawsuits like the one now.

Conclusion: SEC feared opponents of Coinbase and altcoins like Solana

Ripple CEO Brad Garlinghouse has just used sharp words like “deranged” against the head of the SEC, Gary Gensler . The atmosphere between the crypto industry and the SEC is toxic and Coinbase is no exception. With the dead-end arguments of “securities” and “investment contracts,” the SEC wants to impose far-reaching regulation on the industry. The SEC has more than 50 altcoins in its sights. Cardano and Solana are the largest.

It seems encouraging that Judge Failla is apparently delving deeply into the matter in SEC vs. Coinbase and sees that there is no clear precedent so far. We will predictably hear a lot more from US courthouses where the SEC appears in 2024.

The Ripple and XRP case, for example, will enter its second round from March. Investors should not underestimate the risks posed by the SEC to leading altcoins. Anyone who thinks that the SEC has changed its anti-crypto position by approving Bitcoin ETFs last week will not only be disabused by the Coinbase process.

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(Featured image by PiggyBank via Unsplash)

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