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Ripple’s CTO David Schwartz has criticized the SEC’s latest argument in the ongoing Coinbase legal tussle.
David Schwartz, the CTO at Ripple Labs, has reacted to the SEC’s latest filing in the lawsuit against San Francisco-based crypto exchange Coinbase.
SEC Opposes Coinbase Motion to Dismiss Case
For context, the SEC recently filed an opposition to Coinbase’s motion to dismiss its lawsuit.
Notably, the SEC reiterated its position that some crypto assets listed on Coinbase constitute investment contracts under the Howey Test, a longstanding securities test in the US.
Expectedly, the SEC’s recent motion in the Coinbase lawsuit stirred discussions among crypto enthusiasts, with legal experts giving their take on the filing.
Pro-XRP Lawyer Knocks SEC
In a tweet yesterday, Australia-based lawyer Bill Morgan questioned some of the SEC’s recent arguments in the case.
“If crypto assets embody some underlying value, that value is accessed through the digital token,” an excerpt from the SEC’s motion read.
Reacting, Attorney Morgan asserted that the argument is tautological. He slammed the SEC for filing the most “nonsensical and confused” statements it has ever made about the value and nature of crypto.
The entire passage may be the most confused nonsensical statements ever made by the SEC about the nature and value of #crypto. /5
— bill morgan (@Belisarius2020) October 7, 2023
Ripple CTO Reacts
Responding to Attorney Morgan’s analysis, Ripple CTO stressed that he gets mixed feelings whenever he reads the arguments. He said the argument makes sense whenever he reads it, but after a while, it doesn’t.
Interestingly, Schwartz provided his own understanding of the argument made by the SEC.
“Everything’s value comes from what you can do with it and from everything in the world that makes the things you can do with it useful,” he noted.
Every time I read it, I think it almost makes sense but then it doesn't again. Everything's value comes from what you can do with it and from everything in the world that makes the things you can do with it useful.
— David "JoelKatz" Schwartz (@JoelKatz) October 7, 2023
SEC v. Coinbase
In June, the SEC charged Coinbase with violating federal securities laws. It claimed the team behind Coinbase operated the trading platform as an unregistered securities exchange.
The SEC accused Coinbase of facilitating the trading of various assets deemed as unregistered securities, including ADA, VGX, MATIC, and FLOW.
However, Coinbase denied the allegations, asking the judge to dismiss the lawsuit. Notably, the SEC filed an opposition to the request last week, emphasizing that Coinbase has substantial knowledge that some crypto assets listed on its platform are unregistered securities.
Meanwhile, the judge has yet to issue a verdict on the matter.