The U.S. SEC opposes Coinbase's motion for a ruling that "crypto transactions do not constitute investment contracts."

ChainCatcher News, the U.S. Securities and Exchange Commission (SEC) has filed a motion requesting a federal judge to dismiss cryptocurrency exchange Coinbase's argument that "crypto transactions do not constitute investment contracts." The crux of the debate lies in how the judge will determine the correct interpretation of the key precedent known as the Howey test in securities law.

Previously, the SEC sued Coinbase in June, claiming that the U.S. company failed to register as a securities exchange with the market regulator. Coinbase dismissed the case, requesting the judge to make a pre-trial ruling that cryptocurrency transactions are different from investment contracts because no actual contract is established in the transactions. Coinbase stated that when it went public, the SEC had already recognized its actions. The SEC countered that the agency's allowance for Coinbase to go public does not automatically mean that transactions on the platform comply with securities law.