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COINBASE SEEKS COURT RULING TO CLARIFY CRYPTO TRADES AND CHALLENGE SEC’S AUTHORITY: BLOOMBERG

As per a latest Bloomberg report, Coinbase Inc. asked the Second Circuit to say that digital token trades on its platform aren’t transactions governed under federal securities law.

“There is no more pressing issue in securities law today than the scope of the Securities and Exchange Commission’s authority to regulate secondary trades of digital assets,” Coinbase said in its petition docketed in the US Court of Appeals for the Second Circuit. The appeals court could “clear away the cloud that currently hangs over the cryptocurrency market,” it noted.

Second Circuit Ruling Could Accelerate Resolution

Notably, A decision by the Second Circuit stating that token trades aren’t securities transactions could speed up the end of the SEC’s case against Coinbase and ease US crypto regulations. The Trump administration has indicated that it will provide crypto companies with greater regulatory flexibility.

The case gives the appeals court a chance to weigh how it should apply the “Howey test” to crypto transactions. 

Coinbase argued in its brief that trades on its platform are not investment contracts, but asset sales. The US District Court for the Southern District of New York granted Coinbase’s request to seek an immediate appeal earlier this month in an SEC enforcement suit.

The US Chamber of Commerce and Blockchain Association have filed briefs supporting the Second Circuit’s review of the Coinbase case. 

They highlighted that the lack of clarity on whether crypto trades are investment contracts could have negative effects, as federal courts remain divided on the issue.

The Need For Legal Clarity

The SEC sued Coinbase in 2023, accusing the platform of operating as an unregistered securities exchange. Coinbase argues that its crypto trades aren’t investment contracts and thus not under SEC jurisdiction.

Coinbase’s chief legal officer emphasized the need for legal clarity on this issue. Meanwhile, Trump’s SEC has created a “crypto task force” to develop a clear regulatory framework, and the US Court of Appeals has ordered the SEC to explain its refusal to provide crypto-specific rules.

@ Newshounds News™

Source:  Coinpedia

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REPUBLICANS SEEK TO OVERTURN IRS CRYPTO BROKER RULE

Corresponding resolutions were introduced to “roll back the disastrous” rule requiring custodial brokers to report transactions

Congressional Republicans are working to reverse new IRS guidelines that require so-called “custodial brokers” to report transactions.

Rep. Mike Carey and Sen. Ted Cruz this week introduced corresponding resolutions seeking to “roll back the disastrous IRS broker rule.”

The legislation comes weeks after a group of crypto lobbying firms sued the IRS over the rule. They claim the requirement “exceeds the agencies’ statutory authority, violates the Administrative Procedure Act (“APA”) and is unconstitutional.”

As it currently stands, starting in 2025, custodial brokers are required to report gross proceeds. In 2026, they will have to report cost basis for certain transactions
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The final version of the 1099-DA form was published at the end of last year. While earlier drafts had included a section where brokers had to identify their “type” of business, the final form nixed this box. It’s a small change, but by cutting this section the IRS more or less punted the issue of DeFi actors.

Even so, those opposed to the rule claim that the rule still imposes unfair reporting obligations on intermediaries and other actors in the crypto space.

The resolutions have some co-sponsors (Sens. Cynthia Lummis and Tim Sheehy, to name a few), but neither have been scheduled for a markup or vote just yet. This is a hot-button issue in the crypto space though, so we’d expect companies to be directing a significant amount of their lobbying efforts here.
@ Newshounds News™

Source:  Blockworks

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COINBASE CEO: EXCHANGE WILL DELIST USDT IF AUTHORITIES DEMAND IT

Coinbase CEO recently stated that his exchange would delist Tether’s USDT if authorities demand it or if Tether fails to comply with new US laws.

New Stablecoin Regulations on Horizon

Coinbase Global CEO Brian Armstrong has said his cryptocurrency exchange would have no choice but to delist the stablecoin issued by Tether, known as USDT, should authorities demand it.

Armstrong, who has lobbied the U.S. to create a cryptocurrency framework, added that Coinbase would take similar action if Tether fails to comply with any new U.S. laws.

However, according to a Wall Street Journal (WSJ) report, the CEO acknowledges that many of Coinbase’s users hold the stablecoin, and the company’s desire is to preserve this status quo.

Armstrong’s remarks about the possibility of Coinbase completely delisting USDT from its platforms come a month after the crypto exchange delisted the stablecoin on its platform used by Eurozone residents.

As reported by Bitcoin.com News, months before the delisting, Coinbase, which is a shareholder in another stablecoin issuer Circle, framed the move as part of its efforts to adhere to new rules requiring issuers to obtain an e-money license from a European Union member state.

The new rules also obligate stablecoin issuers to hold a portion of their reserves in cash at banks, something Tether reportedly opposes.

“There are a lot of people with tether, and we want to give them an off-ramp, if we want to help them transition to a system that we think is more secure,” Armstrong said.

With the U.S. set to shift its stance under Donald Trump, some believe that two stablecoin bills seeking to require stablecoin issuers to hold U.S. Treasury bonds will be passed. If enacted, such a law would compel Tether and other stablecoin issuers to liquidate non-U.S. Treasury assets.

Late last year, Tether, which posted a net profit of $2.5 billion in the third quarter of 2024, claimed to hold over $105 billion in cash and cash equivalents, with a notable $102.5 billion in direct and indirect exposure to U.S. Treasuries. Furthermore, the stablecoin issuer disclosed that it held assets, including precious metals and secured loans, with a face value of just over $20 billion.

While the enactment of laws proposed by U.S. lawmakers would require Tether to convert these assets to U.S. Treasury bonds, the WSJ report acknowledged that neither bill has made significant progress.

@ Newshounds News™

Source:  Bitcoin News

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