In a lawsuit against Coinbase, the U.S. Securities and Exchange Commission (SEC) argued that the cryptocurrency lacked any “inherent or intrinsic value.” This view drew criticism from Tesla CEO Elon Musk and Dogecoin co-founder Billy Marcus.
Marcus criticized the SEC on social media platform
Musk responded quickly, questioning the SEC's assertion, saying: "If you have to pay taxes, is it true, otherwise is it not true?"
Marcus replied: "The authenticity of it is provisional."
In response to Coinbase’s motion to dismiss the agency’s lawsuit, the SEC asked a judge to reject Coinbase’s argument that cryptocurrency transactions do not constitute investment contracts. The SEC justified its position by relying on federal securities laws, arguing that it should be flexible in interpreting those laws using a legal principle known as the "Howey test."
The SEC wrote in its filing: “If a cryptoasset embodies some underlying value… then that value is acquired through a digital token. But the token itself has no inherent or inherent value—it is tied to its underlying value, which in this case, in the case of the cryptoasset at issue, is an investment contract.”
However, Coinbase’s chief legal counsel Paul Grewal dismissed the SEC’s arguments as “more of the same old story.” "The SEC's argument today means that everything from Pokemon cards to stamps to Swiftie bracelets are securities," Grewal wrote. "As (New York Rep. Rich Torres) made clear last week, this is simply not the law, nor should it be."