Ex-Coinbase Manager Tests If SEC Crypto Reach Is ‘Major’ Question

The Securities and Exchange Commission will wrangle with the question of whether regulating a crypto token is a “major” issue, seeking an answer that could help define how the controversial products are policed.

The agency has sued Ishan Wahi, an ex-Coinbase manager, and his brother for alleged insider trading involving tokens listed on Coinbase’s platform.

The SEC says it has jurisdiction because several tokens are securities. But the defendants argue regulating digital tokens is a major issue. The SEC’s power grab violates the “major questions doctrine” that says an agency can’t bring about a major policy without clear statutory authorization, ...