The SEC says cryptocurrencies have no intrinsic value.

Cryptocurrencies do not possess intrinsic value. Such a comment was made by a representative of the SEC during hearings in the regulator’s case against Coinbase, Decrypt reports.

Following the hearing, the judge rejected the agency’s request for a summary judgment. Motion was in response to the platform’s plea to dismiss the SEC’s suit.

Then, citing the Howey test, the company explained that cryptocurrencies on the secondary exchange market are not part of any agreements under which a sale of an asset tied to a contract is conducted. In addition, token issuers have no obligations to investors.

The SEC noted that many cryptocurrencies differ from one another precisely because they themselves have no intrinsic value. The tokens cited in the suit meet the Howey test criteria.

“If crypto assets embody some underlying value, […] access to it is via the digital token. But the latter is tied to its underlying value, which is an investment contract,” — the transcript says.

The platform’s chief counsel, Paul Grewal, described the argument as “the same thing, but in different words.”

“The SEC’s statements would imply that everything—from Pokémon cards to stamps and Swiftie bracelets—would also be securities. As Rep. Richie Torres clearly made clear, this simply does not conform to the law and should not be so,” — the executive wrote.

The @SECgov just filed its opposition to our motion to dismiss their case against @Coinbase. It’s more of the same old same old. But don’t just take my word for it – take a look for yourself. 1/7 https://t.co/QMdkRoiq0V

— paulgrewal.eth (@iampaulgrewal) October 3, 2023

Grewal was supported by his colleague Stuart Alderoty of Ripple Labs.

“The SEC’s position in the Coinbase case is so wrong that I don’t know where to start. To begin with, the SEC claims, without citations or argument, that digital assets have no intrinsic value, while collectible baseball cards do,” — he said.

There is so much wrong with the SEC’s brief in the Coinbase case I don’t know where to begin. Let’s start with the SEC claiming, without citation or support, that digital assets have no innate or inherent value while collectible baseball cards do.

— Stuart Alderoty (@s_alderoty) October 5, 2023

Earlier, Coinbase reminded that for many years it has complied with regulatory requirements and repeatedly requested direct guidance from the SEC on enforcing federal securities laws in relation to the cryptocurrency industry.

In a separate document the exchange said that its rights to due process were violated and possibly the Major Questions Doctrine by the Commission. The company asked to set a seven-week schedule for its motion, the regulator’s objections and its response to it.

Coinbase has declined to change its business model amid the Commission’s suit.