A US judge has ruled against Coinbase’s motion to dismiss the US Securities and Exchange Commission (SEC) lawsuit. Indeed, the federal judge ruled that the agency had made a reasonable enough argument for the platform operating as an unregistered broker, exchange, and clearinghouse for the case to be continued.
Judge Katherine Polk Failla of the US District Court for the Southern District of New York made the decision Wednesday. Subsequently, the development is an early defeat for the cryptocurrency platform, as it was seeking to dismiss the lawsuit issued last year.
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Coinbase Suffers First Lose to SEC in Lawsuit
Although the digital asset market has seen tokens surging thus far in the year, the industry has faced some tumultuous developments. The political landscape has placed the asset class front and center. Amid an election year, the United States has taken to engaging in heated debates regarding its position and potential.
Moreover, there has continued to be a concerted effort to clamp down on bad actors within the industry. Specifically, KuCoin recently served criminal charges for avoiding anti-money laundering laws and violating the Bank Secrecy Act. Now, one prominent crypto platform is facing a lawsuit of its own.
During the early proceedings of that case, Coinbase’s motion to dismiss its SEC lawsuit was denied by a federal judge on Friday. Indeed, the judge stated that the agency provided enough plausibility within its argument to justify the case moving forward.
Also Read: SEC Lawyer That Led Coinbase Lawsuit Leaves The SEC Agency
According to a CoinDesk report, the judge slated an April 19th deadline for both sides to be on a scheduling plan. The lawsuit first came to fruition last year while the agency filed a high-profile lawsuit against Binance in the same week.
The lawsuit is rooted in Coinbase operations and alleged violations of federal securities laws. Specifically, the SEC claims the platform made trades and offered staking services to citizens. Furthermore, it states the Coinbase Wallet was an unregistered brokerage.
The Judge did dismiss one part of the lawsuit, claiming Coinbase didn’t appear to be acting as a brokerage. However, she ruled that the rest of the case is set to continue. Specifically, she further dismissed Major Questions Doctrine violations from the SEC.