Your daily SEC post is here again. After several blunders, the Gensler authority is under enormous pressure. Will another defeat against Coinbase follow?

U.S. Federal Judge Katherine Polk Failla yesterday (Wednesday) questioned Coinbase and the U.S. Securities and Exchange Commission (SEC) about their differing views on whether and when digital assets are securities. The case is considered controversial and is being closely watched by the crypto industry. The questions focused on legal precedent regarding the definition of securities and the characteristics of various cryptocurrencies traded on Coinbase.

The SEC sued Coinbase in June 2023, alleging that the company violated federal securities laws by allowing customers to trade in at least 13 crypto currencies (including Solana, Cardano and Polygon).

The U.S. Securities and Exchange Commission (SEC) has focused on several companies that provide trading platforms and settlement services. The charges filed by the SEC against Coinbase are some of the most significant in the crypto sector.

During a recent court hearing, Judge Failla urged the SEC to define terms such as "securities" and "wagers" more clearly. Although the Securities Act of 1933 contains a definition of "security," many experts rely on Supreme Court precedent to determine whether an investment product should be considered a security.

In the case against Coinbase, the SEC is following a similar strategy as in the case against Binance. The SEC therefore asked the court to consider a recent decision in the case against Terraform Labs, which held that the company had offered securities without the required registration.

The ruling in this case is expected to have a major impact on the crypto market as it will also help clarify the scope of the SEC's authority. As a preliminary observation after the more than four-hour hearing, Failla indicated that unanswered questions remain.