Weekly Preview: Coinbase v. SEC, big token unlocks, and more

For anyone longing for a return to last week’s exciting spot bitcoin ETF horse race, I have some unfortunate news: Tomorrow is the federal holiday of Martin Luther King Jr. Day, so the stock market will be closed. However, the blockchains will continue to be validated, and several major events are scheduled for later in the week, including Coinbase’s final showdown with the SEC, over $150 million in token unlocks, and the World Economic Forum holding its annual meeting in Davos. Switzerland.

Here’s what you need to know.

Coinbase vs. the SEC: 4 outcomes

Coinbase will appear before the SEC in federal court in Manhattan on Wednesday, January 17, on Coinbase’s motion for judgment on the pleadings in the SEC’s case against the company.

Quick summary: the SEC is accusatory Coinbase violated national securities laws by selling 13 crypto tokens that the agency claims are unregistered securities and by failing to register its staking-as-a-service program. Coin base argues that the agency allowed the company to go public, essentially signing off on its core business, and overreached due to the lack of a congressional mandate.

There are four outcomes for the upcoming hearing in federal court on Wednesday, expert crypto attorney James A. Murphy, aka MetaLawMan, on X. An outright victory for the SEC, with the judge denying Coinbase’s motion, would be a “low bar,” according to Murphy, as the SEC only needs to show that their claim is “plausible.”

However, Coinbase only has one chance at an outright victory: the judge grants Coinbase’s motion with prejudice, meaning the SEC will have to appeal to a higher court to pursue the case. Coinbase could also achieve a more limited victory, such as if the judge grants the motion regarding the tokens but denies it regarding the staking service. The ultimately unlikely outcome, according to Murphy, is that the judge grants Coinbase’s motion but allows the SEC to amend certain deficiencies.

In the event that Coinbase’s motion is denied in whole or in part, the case will be heard for about a year, Murphy estimates, before a motion for summary judgment is filed. Murphy added that he does not expect a ruling in the case at this time.

Token unlock example

These are the biggest token unlocks happening next week, according to Token Unlocks data:

ApeCoin MONKEY

-5.41%
the token affiliated with the Yuga Labs ecosystem will unlock 15.6 million tokens worth approximately $23 million on January 16 at 7:00 PM UTC. Axie Infinity AXS

-4.82%
associated with the play-to-earn game, will unlock 3.43 million tokens worth approximately $28 million on January 18 at 8:10 AM. injective INJ

-5.75%
the native token of layer 1 blockchain, will unlock 3.67 million tokens worth approximately $140 million on January 20 at 7 p.m., and SPACE ID card

-4.07%
associated with the digital identity platform, will unlock 53 million tokens worth approximately $16 million on January 21 at 7 p.m.

Crypto at the World Economic Forum

The World Economic Forum, best known for its annual meetings in Davos, Switzerland, will meet there again this week. According to a message in Financial NewsSeveral crypto companies are expected to emerge, including Ripple, Circle, Coinbase, Stellar and Hedera, as crypto companies try to argue for their legitimacy on the global financial stage.