Coinbase Seeks Appeal in SEC Battle
Coinbase pushes for an appeal in its legal fight with the SEC, aiming to clarify how securities laws apply to digital assets.
Coinbase has requested court approval for an interlocutory appeal in its ongoing legal fight with the SEC, seeking to clarify the Howey Test standard, which defines securities. Coinbase believes that an appeal now would give the Appellate Court a clearer view of how securities laws apply to digital assets.
The request follows an earlier filing made in April, nearly seven months ago. Coinbase wants the court to review its argument that the Howey Test should not apply to its operations, impacting the way digital assets are categorized. In response, the SEC urged the judge to reject the appeal, claiming that Coinbase has no solid grounds to justify it. However, Coinbase has renewed its request after the SEC’s recent move to challenge the Ripple ruling, arguing that it conflicts with established legal precedents.
On October 4, Coinbase submitted a letter to Judge Katherine Polk Failla, reiterating its request to certify the appeal. If approved, this would enable the Second Circuit Court to examine Coinbase’s concerns before a final decision is made in the lower court. Coinbase believes that addressing its arguments now would streamline the litigation process.
Coinbase argued that its appeal should proceed at the same time as the SEC’s, stating that it would allow the court to get a full picture of the SEC’s legal position. The company emphasized that the SEC’s stance has caused confusion in the industry. Coinbase cited a statement from the regulator acknowledging the “industry-wide significance” of applying the Howey Test to digital assets.
Cryptocurrency lawyer James Murphy supported Coinbase’s move, calling it a “smart strategy.” He expressed surprise that Judge Failla had not yet ruled on Coinbase’s original request, noting that similar motions are usually resolved quickly. Murphy believes the SEC’s appeal in the Ripple case will strengthen Coinbase’s position.
“It’s surprising that Judge Failla hasn’t ruled on this after so many months. Typically, these types of motions are addressed swiftly. The SEC’s appeal in the Ripple case has only made Coinbase’s argument stronger,” Murphy said.
