Coinbase described the U.S. Securities and Exchange Commission’s (SEC) intent to strike out its defenses as a “disfavored” motion, according to a July 12 letter to Judge Katherine Failla.

In the letter, the Coinbase lawyers pointed out that its defense based on the “major questions doctrine, abuse of discretion, equitable estoppel, unclean hands, and laches” should succeed because the SEC’s proposed motion does not meet the dismissal standards.

The “major questions doctrine” is a principle in administrative law in the United States. Essentially, this doctrine holds that federal agencies do not have the authority to issue regulations on major policy issues unless Congress has clearly and explicitly delegated that authority to them. The doctrine is often invoked in legal challenges to agency rules, particularly in disputes over the scope of an agency’s regulatory power.

Meanwhile, Coinbase chief legal officer Paul Grewal stated that the exchange would address the Court today, July 13.

Coinbase restates defense

Coinbase said the U.S. Congress was yet to grant the SEC regulatory authority over the crypto industry, adding that the lawmakers were still “considering regulatory structures for the digital assets industry.”

Coinbase said the U.S. Supreme Court’s recent application of the major questions doctrine in a similar case shows that the SEC cannot defend its claims. Grewal recently explained how the SEC’s interpretation of the major questions doctrine contradicts that of the apex court.

The exchange further highlighted SEC’s previous statements and conducts as factual claims of why the regulator could not strike its defenses. Coinbase wrote:

“The same is true of the other defenses the SEC proposes to move to strike. Coinbase’s abuse of discretion defense, based on the Commission’s decision to assert new regulatory authority over digital asset platforms by retroactive enforcement action rather than notice-and-comment rulemaking, plainly has grounding in fact and law.”

Coinbase noted that all the defenses the SEC proposed to strike have the same factual predicate as its fair notice defense, which the regulator, surprisingly, has no issue with.

Meanwhile, Coinbase wants the matter to proceed as quickly as possible, with the exchange requesting that the deadline for motion and opening brief should be within seven days of the Court order and the answering brief should be filed not later than 28 days after.

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