SEC scores big win in lawsuit against crypto exchange Coinbase

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• The Securities and Exchange Commission scored a major win in its lawsuit against Coinbase.
• A judge ruled that the SEC's claim that the cryptocurrency exchange engaged in unregistered sales of securities could be heard by a jury at trial.
• Coinbase shares were trading around 2.5% lower on news of the ruling in Manhattan federal court.

The Securities and Exchange Commission scored a major win in its lawsuit against Coinbase on Wednesday, as a judge ruled that its claim that the cryptocurrency exchange engaged in unregistered sales of securities could be heard by a jury at trial.

Coinbase's shares fell around 2.5% on news of the ruling in Manhattan federal court rejecting its bid to dismiss the SEC's complaint.

The regulator first filed suit against Coinbase in June, alleging the company was acting as an unregistered broker and exchange. The agency also demanded the company be "permanently restrained and enjoined" from continuing to do so.

"The 'crypto' nomenclature may be of recent vintage, but the challenged transactions fall comfortably within the framework that courts have used to identify securities for nearly eighty years," U.S. District Judge Katherine Polk Failla wrote in her ruling.

"The Court finds that the SEC adequately alleges that Coinbase, through its Staking Program, engaged in the unregistered offer and sale of securities," Failla wrote.

The judge elsewhere in that ruling agreed to dismiss the SEC's claim in the lawsuit that Coinbase acted as an unregistered broker by making its Wallet application available to customers.

The company responded to CNBC's request for comment with a link to a series of posts on social media platform X by Coinbase's chief legal officer, Paul