From Nasdaq:

A federal judge questioned the U.S. securities regulator about the specific features that would constitute an investment contract for a crypto token in the lawsuit against Coinbase, the world’s largest publicly traded cryptocurrency exchange.

The SEC sued Coinbase in June for facilitating trading of at least 13 crypto tokens, including Solana, Cardano, and Polygon, which should have been registered as securities.

In a Manhattan court, the judge expressed concern about broadening the definition of a security and asked SEC attorneys about the attributes that made the 13 tokens securities.

The hearing is a significant development in the court battle between Coinbase and the SEC and could clarify the SEC’s jurisdiction over the digital assets sector.

The SEC’s lawsuit also targeted Coinbase’s “staking” program, in which it pools assets to verify activity on blockchain networks and takes commissions. The case is one of many the SEC has brought against the crypto sector, shifting focus to firms acting as broker-dealers.

Crypto companies deny that most tokens meet the definition of a security and say legislation is needed to regulate the industry.



Read more: Coinbase, SEC face off in federal court over regulator’s crypto authority