Coinbase’s awareness of the potential application of federal securities laws to its listings was acknowledged years ago, according to a recent filing by the U.S. Securities and Exchange Commission (SEC).

The SEC responded to Coinbase’s earlier filing, in which the cryptocurrency exchange argued that the agency lacked sufficient jurisdiction to pursue a lawsuit against it.

The SEC had filed a lawsuit against Coinbase a month prior, alleging that the company was operating as an unregistered broker, clearinghouse, and exchange, offering at least 13 unregistered securities in the form of cryptocurrencies.

In its latest filing, the SEC stated its intention to oppose any motion for judgment that Coinbase might file and requested the court to dismiss Coinbase’s claims that the lawsuit violated the major questions doctrine and other related concerns.

In its filing, the SEC criticized Coinbase’s argument, stating, “Coinbase, a multi-billion-dollar entity advised by sophisticated legal counsel, argues it was unaware that its conduct risked violating the federal securities laws, and suggests that by approving Coinbase’s registration statement in 2021, the SEC confirmed the legality of Coinbase’s underlying business activities – at that time and for all time.”

The regulator further asserted that Coinbase had previously embraced the legal framework established by the U.S. Supreme Court to determine the compliance of certain cryptocurrencies with federal securities laws, while discouraging crypto issuers from making statements associated with securities.

The SEC also highlighted Coinbase’s own public filings, which acknowledged that the classification of listed assets as securities could pose a potential risk to investors.

According to the SEC, “These actions clearly show that Coinbase understood that the securities laws could apply to its conduct and knew which rules to consider in evaluating the legality of its conduct, but nevertheless made the calculated decision to take on this risk in the name of growing its business.”

Regarding Coinbase’s motion for judgment, the SEC outlined its counterarguments, referring to two flawed assertions made by the crypto exchange.

Coinbase claimed that an investment contract necessitated a formal agreement, while the second argument contended that investment contracts only pertained to asset sales conducted on secondary markets.

The SEC countered by stating that the Howey Test, used to determine the existence of investment contracts, does not require a formal contract and that transactions on secondary markets can still violate securities laws, as evidenced by the SEC’s recent legal victory against LBRY.

The SEC also refuted Coinbase’s major questions doctrine argument, stating, “This case, by contrast, involves the SEC’s exercise of its longstanding authority to enforce statutory requirements. In 1934, Congress authorized the SEC to enforce the federal securities laws through civil law enforcement actions.”

A hearing has been scheduled for July 13 in the District Court for the Southern District of New York.