A federal judge in Manhattan yesterday grilled Coinbase and the Securities and Exchange Commission (SEC) about their divergent views on whether and when digital assets are securities, in a case closely watched by the cryptocurrency industry, Reuters reported. Coinbase has asked the court to dismiss the Securities and Exchange Commission's lawsuit alleging the largest U.S. crypto exchange is flouting its rules. Judge Katherine Polk Failla on Wednesday heard arguments from both sides, focusing her questions on the legal precedent defining securities, and the attributes of several crypto tokens traded on Coinbase and elsewhere that the regulator has deemed investment contracts. Failla did not decide the matter from the bench, noting she was still weighing some questions after the more than four-hour hearing. The judge's ruling is likely to have implications for digital assets by helping to clarify the SEC's jurisdiction over the sector. The case is one of a slew the SEC has brought against the crypto sector. The agency focused initially on companies selling digital tokens, but under the leadership of chair Gary Gensler has targeted firms offering trading platforms and clearing activity, and acting as broker-dealers.
