A major cryptocurrency exchange, Coinbase, has made progress despite a recent legal loss against the U.S. Securities and Exchange Commission (SEC). In early October, a US judge declined Coinbase’s request to throw out the SEC’s lawsuit against the firm.
Paul Grewal, Coinbase’s Legal Chief, revealed on X that the corporation has applied to the Court for authorization to appeal the SEC case’s crucial point: whether a “investment contract” necessitates a formal agreement.
Today, Coinbase submitted a request to the court for permission to appeal an interim decision in our ongoing case with the SEC. The point of dispute is whether an “investment contract” necessitates a formal contract – our view is that it does, but the SEC holds a different opinion on this controlling issue. (1/5)
— paulgrewal.eth (@iampaulgrewal) April 13, 2024
In simpler terms, Judge Failla refused to throw out Coinbase’s legal battle with the SEC, stating that certain digital assets could be classified as investment contracts according to the Howey test, based on Judge Rakoff’s view from the Terra case that these assets may function within a larger system or ecosystem.
Coinbase is asking Judge Failla for permission to file an interlocutory appeal on her latest ruling regarding investment contracts. They argue that the way the Howey test is applied to digital assets is a significant legal question that needs to be clarified, which could potentially allow for an interlocutory appeal.
Grewal explains that Coinbase is choosing to file its appeal more quickly than normal because it’s important for the advancement of the cryptocurrency industry.
Based on Grewal’s perspective, Coinbase shares the view that it’s worth appealing a court’s decision regarding whether a cryptocurrency transaction qualifies as an “investment contract,” since the Securities and Exchange Commission (SEC) has similarly argued this point before.
In the Ripple case, the SEC acknowledged that there exists a significant legal dispute among professionals, and emphasized the wider implications of this issue within the industry.
The decision made by Coinbase lately could impact the progress of the SEC case: If the SEC’s appeal is accepted, the original court proceedings will be put on hold until the Second Circuit Court renders its judgment.
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2024-04-13 16:18