The Securities and Exchange Commission said Coinbase should reject its move to appeal the decision to regulators.
Last month, Coinbase intermediate appeal according to the judge decision This is to ensure that lawsuits involving the SEC and platforms can proceed without being dismissed. In its appeal, Coinbase asserted a disagreement with the Howey test. It’s a 1946 U.S. Supreme Court case that the SEC often cites to determine whether assets qualify as investment contracts, or securities.
The SEC countered Friday, saying there was “no substantive basis for disagreement.”
“More broadly, it is clear that Coinbase does not like Howey and the current securities regulatory framework,” the SEC said in the filing, “and has decided to adjust its business practices in ways that may make compliance with existing laws costly.” revealed. “However, Coinbase’s decision to do so and its desire to rewrite legal precedent established decades ago to suit its own policy goals and business needs do not provide a compelling reason to prematurely certify the appeal in this case.”
It is highly unlikely that an interlocutory appeal filed before the end of the litigation process will be granted. The SEC attempted to file an interim appeal against Ripple last year, but ultimately failed. rejected.
Judge: “Case can proceed”
at decision In making the case, Judge Katherine Polk Failla of New York disagreed with Coinbase’s argument that investment agreements require a formal contract. When customers purchase tokens from Coinbase, they are not simply purchasing a token, but rather a “digital ecosystem of tokens,” she said, Failla said.
For Coinbase’s appeal to proceed, Judge Failla must grant it. SIf the appeal continues, the remainder of the case will be held by the trial court. The exchange will then await a resolution from the U.S. Court of Appeals for the Second Circuit.
Only if the Second Circuit rules on the case will the case be returned to the trial court according to the Second Circuit’s guidelines on this particular issue. At that point, the court will proceed with any remaining cases.
Coinbase was sued by the SEC last year for operating as an unregistered exchange, broker, and clearing agent. Regulators have also raised issues with Coinbase’s staking and wallet services. Judge Failla sided with Coinbase on the wallet section and dismissed the SEC’s claims.
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