In a letter filed on Wednesday in Manhattan federal court, Coinbase stated that the SEC has no authority to pursue civil claims as assets trading on its platform are not “investment contracts,” and thus not securities

Coinbase, the biggest U.S. cryptocurrency platform, said it will ask a judge to dismiss the U.S. Securities and Exchange Commission (SEC) lawsuit alleging it breached the law by failing to register its business.

In a letter filed on Wednesday in Manhattan federal court, the crypto platform stated that the Securities and Exchange Commission has no authority to pursue civil claims as assets trading on its platform are not “investment contracts,” and thus not securities.

The Securities and Exchange Commission can pursue its claims only if the tokens and staking services it has identified are ‘securities,’ the crypto platform stated. They are not.

The Securities and Exchange Commission sued Coinbase on June 6, saying it made billions of dollars acting as an intermediary including by trading at least 13 crypto assets, or tokens, like Solana, Cardano and Polygon that should have been registered as securities.

Coinbase was also sued over a “staking” program where it pools crypto assets to aid activity on the blockchain network, in exchange for “rewards” it provides customers after taking commissions for itself.

The lawsuit was filed one day after the Securities and Exchange Commission sued Binance, the world’s biggest cryptocurrency exchange, accusing it of inflating trading volumes, misusing customer funds and lying about its operations.

SEC Chair Gary Gensler has been trying to claim jurisdiction over the crypto sector, which he has said diminished investor trust in the U.S. capital markets.

In another filing denying the Securities and Exchange Commission’s substantive claims, Coinbase said it “welcomes regulation,” but that the regulator was arbitrarily and without Congress’ consent trying to fill the “regulatory gap” over crypto assets.

Agency enforcement authority is vital but not limitless, the crypto platform said. The Securities and Exchange Commission’s action here is beyond those limitations and illegal.

Shares of Coinbase’s parent Coinbase Global increased $1.58, or 2.2 per cent, to $72.33 on the Nasdaq.