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Coinbase Defends Solana, Cardano and Other Altcoins Against SEC Lawsuit

In New York, the crypto exchange Coinbase and the Securities and Exchange Commission (SEC) met in court. The point of contention is the classification of altcoins such as Solana (SOL) and Cardano (ADA). The procedure could have major consequences. 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.




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.

Read more about Coinbase and find other important business news of the day with our companion app Born2Invest.

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.


(Featured image by PiggyBank via Unsplash)

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Valerie Harrison is a mom of two who likes reporting about the world of finance. She learned about the value of investing at a young age upon taking over her family's textile business when she was just a teenager. Valerie's passion for writing can be traced back to working with an editorial team at her corporate job, where she spent significant time working on market analysis and stock market predictions. Her portfolio includes real estate funds, government bonds, and equities in emerging markets such as cannabis, artificial intelligence, and cryptocurrencies.