(CTN News) – The SEC lawsuit against Coinbase could be resolved within three months. A lawsuit filed by the Securities and Exchange Commission (SEC) against Coinbase last year was dismissed last week by the court.
Citing a Citi analyst, SeekingAlpha reported Sunday (Jan. 21) that the judge is expected to decide on the dismissal in three months.
According to Citi analyst Peter Christiansen, the size of the case implies that the dispute is unlikely to be resolved on motions alone. The company remains neutral/high-risk based solely on regulatory risk, as a potential ruling could have a significant impact on its future development.”
Coinbase, the largest cryptocurrency firm in the U.S., was sued by the SEC in June for operating as an unregistered exchange.
In court last week, the company requested that Judge Katherine Polk Failla dismiss the case. However, the judge adjourned proceedings without making a decision.
According to Citi’s Christiansen, several outcomes are possible. Upon allowing the suit to proceed, the judge will likely order a discovery phase lasting at least a year before a summary judgment can be rendered.
The motion could be granted with prejudice by Polk Failla, although the SEC could appeal. Alternatively, the judge could dismiss the suit without prejudice, allowing the SEC to amend its complaint. Coinbase’s motion would be granted in part, dismissing just part of the SEC complaint.
According to PYMNTS last week, Coinbase has argued that the tokens traded on its exchange are not securities. Like traditional stocks and bonds, these tokens do not come with any rights associated with them, according to William Savitt, the company’s lawyer.
Savitt explained that there is a difference between buying Beanie Babies Inc. and buying Beanie Babies.
There has been a contentious debate in the courts regarding whether digital tokens should be considered securities. The SEC did not have jurisdiction over Ripple Labs’ XRP token in a similar case decided by a federal judge. The SEC has filed a complaint against Coinbase in which it seeks a judge’s dismissal of the claim based on the Ripple decision.