Web3 analyst James Murphy weighed in on comments made by Judge Katherine Polk Failla during a pre-motion conference between the SEC and Coinbase over the crypto exchange’s token listings.
Judge Failla’s remarks seem to align her position with Coinbase’s arguments, according to Murphy. This could indicate the SEC lawsuit against Coinbase may not be as strong as initially thought.
Judge’s comments support Coinbase’s position
Murphy shared portions of the transcript from the pre-motion conference on Twitter, where he noted:
Things went worse for the SEC than was initially reported.The Judge explicitly aligned herself with Coinbase on a key argument. That is unusual for a first appearance.
Judge Failla had commented:
It’s not crazy in the Failla parlance for Coinbase to think that what they were doing was OK because it was exactly what you let them do when they issued the S-1. That’s the point I’m making.
Murphy said this was a “significant tell and not a good one for the SEC”. Judge Failla also remarked:
You [SEC] may say that they [Coinbase] and I [the Judge] are reading too much into the issuance of the S-1.
Ripple lawsuit win gives Coinbase hope
The SEC’s recent loss against Ripple in their long-running lawsuit gave Coinbase confidence they could also win against the SEC. Coinbase’s legal officer Paul Grewal said the Ripple victory “strengthened the confidence” in Coinbase’s case.
The judge in the Ripple lawsuit ruled that XRP is not a security, setting precedent that could aid Coinbase’s defense against the SEC’s allegations regarding its token listings.
In summation, Judge Failla’s comments during the pre-motion conference seem to indicate Coinbase’s arguments have merit and the SEC lawsuit may not be as strong as initially thought. However, the case has just begun so these early signs could change as the lawsuit progresses.
This article is based on the original news published on Cryptotale.