From Nasdaq, Inc.:

In a recent court hearing, a lawyer representing Coinbase Global Inc (NASDAQ:COIN) compared buying cryptocurrencies to collecting Beanie Babies. The lawyer argued that buying crypto tokens doesn’t grant the buyer any rights, unlike traditional securities. The case could have significant implications for the collectibles market.

In a recent court hearing on Wednesday, a lawyer representing Coinbase, William Savitt, likened buying cryptocurrencies to collecting Beanie Babies, reported Business Insider. The argument was presented as part of a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Coinbase, accusing the platform of selling unregistered securities.

The SEC, however, argued that when a crypto token is purchased, the owner is investing in the network or enterprise behind the token. The SEC’s argument is based on a 1946 Supreme Court decision that defines security as an “investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.”

This court case is a crucial moment for the crypto industry. In June, the SEC filed a lawsuit against Coinbase, alleging that the exchange was illegally operating as a national securities exchange, broker, and clearing agency. The SEC also targeted Coinbase’s “staking” program, which it claimed should have been registered with the agency.

Earlier, the SEC used a recent victory in its case against Terraform Labs to bolster its ongoing legal battles with major cryptocurrency exchanges Binance (CRYPTO: BNB) and Coinbase. The judgment concluded that UST (CRYPTO: USTC), LUNA (CRYPTO: LUNA), wLUNA, and MIR (CRYPTO: MIR) tokens are, in fact, securities.

Despite these legal challenges, Coinbase CEO Brian Armstrong has expressed his commitment to continue operations in the U.S., even if it loses its ongoing lawsuit against the SEC. He also vowed to challenge the cease and desist orders issued by ten state regulators against the company’s staking service and eventually extend staking services across all 50 states in the U.S.



Read more: Coinbase Tells Judge That Buying Crypto Is Like Collecting ‘Beanie Babies,’ SEC Says It’s An Investment