July 21, 2024

Weekly Preview: Coinbase v. SEC, big token unlocks, and more

For anyone craving a return to last week’s exciting spot bitcoin ETF horse race, I have unfortunate news: tomorrow marks the federal holiday of Martin Luther King Jr. day, so the stock market will be closed. However, the blockchains will continue on validating, and several important events are scheduled for later in the week, including Coinbase’s latest face-off with the SEC, over $150 million in token unlocks, and the World Economic Forum holds its annual meeting in Davos, Switzerland. 

Here’s what you need to know. 

Coinbase v. the SEC: 4 outcomes

Coinbase will face the SEC in federal court in Manhattan on Wednesday, January 17, over Coinbase’s Motion for Judgment on the Pleadings in the SEC’s case against the company. 

Quick recap: The SEC is accusing Coinbase of violating national securities laws by selling 13 crypto tokens that the agency argues constitute unregistered securities, along with failing to register its staking-as-a-service program. Coinbase argues that the agency let the company go public, in effect signing off on its core business, and is overstepping its reach due to the lack of a congressional mandate. 

There are four outcomes for the upcoming hearing in federal court on Wednesday, expert crypto attorney James A. Murphy, a.k.a. MetaLawMan, on X. An outright win for the SEC, with the judge dismissing Coinbase’s motion, would be a “low bar,” according to Murphy, as the SEC merely has to show their claim is “plausible.” 

However, Coinbase has only one shot at an outright victory: the judge granting Coinbase’s motion with prejudice, meaning the SEC must appeal at a higher court to continue the case. Coinbase may also win a more narrow victory, like if the judge grants the motion with respect to the tokens but denies it with respect to the staking service. The final unlikely outcome, according to Murphy, is if the judge grants Coinbase’s motion but allows the SEC to amend certain deficiencies. 

In the case that Coinbase’s motion is dismissed, either whole or in part, the case will move on to discovery for about a year, estimates Murphy, before a motion for summary judgment. Murphy added he does not expect a ruling in the case at this time. 

Token Unlock Preview

Here are the biggest token unlocks coming up next week, according to Token Unlocks data

ApeCoin, the token affiliated with the Yuga Labs ecosystem, will unlock 15.6 million tokens worth about $23 million on January 16 at 7 pm UTC. Axie Infinity, associated with the play-to-earn game, will unlock 3.43 million tokens worth about $28 million on January 18 at 8:10 am. Injective, the layer 1 blockchain’s native token, will unlock 3.67 million tokens worth about $140 million on January 20 at 7 pm, and SPACE ID, associated with the digital identity platform, will unlock 53 million tokens worth about $16 million on January 21 at 7 pm. 

Crypto at the World Economic Forum

The World Economic Forum, best known for its annual meetings in Davos, Switzerland, is set to convene there once again this week. According to a report in Financial News, several crypto companies are expected to appear, including Ripple, Circle, Coinbase, Stellar and Hedera, as crypto companies attempt to argue for their legitimacy on the global financial stage. 

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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