A U.S. judge has ruled that Coinbase is not a broker for its self-custody cryptocurrency wallet. Attorneys claim this is a “significant setback” for the SEC and a win for DeFi. Attorneys for cryptocurrency are celebrating the recent ruling by a US court to drop accusations against them as a victory for decentralized finance (DeFi) apps and self-custody wallets.
On March 27, U.S. District Judge Katherine Failla rejected Coinbase’s request to have a case filed by the Securities and Exchange Commission dismissed. The SEC claimed that it was not regulated and that its cryptocurrency staking offering was not registered as securities.
Coinbase Refutes All Grounds SEC Sued It For
The judge also found that Coinbase’s self-custody cryptocurrency wallet tool, Coinbase Wallet, which gives users complete control over their assets, was not used by Coinbase to undertake brokerage activity, as claimed by the SEC.
In a March 27 X post, general counsel Zach Rosenberg of Ethena Labs stated, “[This] is a pretty giant win for browser-based wallet extensions, application front ends, and other similar applications.” Rosenberg stressed, “[It’s] not just that they won, but the foundation for it.” He clarified that their assistance in assisting Wallet customers in locating token values does not equate to “routing or making recommendations” as a broker. First filed in June of last year, the SEC sued them because it offered thirteen coins that the agency considered securities and functioned as an unlicensed exchange and broker-dealer, both of which it refutes.
