Key takeaways
- Coinbase was granted an interlocutory appeal from Judge Failla, allowing it to challenge the SEC’s claims in the Second Circuit Court of Appeals.
- The appeal raises important questions about the application of securities law to digital assets, particularly regarding the Howey test.
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Coinbase has taken an important legal step in its ongoing battle with the SEC, with Judge Katherine Polk Failla of the Southern District of New York granting the company a rare interlocutory appeal.
According to the filing, the ruling allows Coinbase to take its case to the Second Circuit Court of Appeals.
The company will dispute the SEC’s allegations, which include claims that it operated as an unregistered exchange and broker-dealer.
Additionally, the SEC accuses Coinbase of selling unregistered securities through its staking program.
“Despite the SEC’s vigorous objection, Judge Failla granted our motion for leave to pursue an interlocutory appeal and stayed the district court litigation,” Paul Grewal, Coinbase’s chief legal officer, said on Platform X .
Judge Failla determined that the appeal raised fundamental questions about whether digital asset transactions on Coinbase qualified as “investment contracts” under securities law, as defined by the Howey test .
The court indicated that guidance from the Second Circuit could significantly advance the resolution of the case.
Fox Business News reporter Eleanor Terrett called the ruling “a big legal victory for Coinbase,” highlighting the unusual nature of such an appeal.
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