In the latest development in a long-running legal case, Coinbase has asked the judge presiding over its fight with the SEC to grant its request for an interlocutory appeal, or an appeal granted before the case was resolved. A separate lawsuit was filed against web3 payment company Ripple.
Coinbase’s original request for an interlocutory appeal was filed in early April and asked how the Second Appellate Circuit could review the Howey test, a key question in the case. The 1946 Supreme Court decision applies to digital assets. “The fact that lawmakers, senators, and regulators were divided in their responses to the questions speaks to the difficulty of the subject matter, and the differing judicial outcomes illustrate the point,” Coinbase’s lawyers wrote.
The SEC filed its own letter a month later requesting the appeal be dismissed, but Judge Katherine Polk Failla in New York has not yet ruled on the appeal request because the agency felt there was “no substantive basis for disagreement.”
Now, Coinbase is once again urging Judge Failla to consider its interlocutory appellate motion following the SEC’s recent appeal in its case against Ripple. The cryptocurrency exchange argues that presenting both cases to the Second Circuit around the same time will help the court give “a full accounting of the legal and practical implications of the SEC’s litigation position.”
“The SEC acknowledged that the issues presented by Howey’s application to secondary market digital asset trading are ‘of industry-wide significance,’ and has now reaffirmed this with its appeal against Ripple,” Coinbase’s lawyers wrote. “Swift and full appeal review is urgently needed.” Coinbase and the SEC were not immediately available for comment.
Interlocutory appeals are rarely granted, but the SEC’s appeal in the Ripple case strengthens Coinbase’s case, said cryptocurrency lawyer James “MetaLawMan” Murphy, who called the lawsuit a “smart move.” “I am surprised that Judge Payla did not rule on Coinbase’s original motion for interlocutory appeal filed in April,” Murphy wrote in X.
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