According to the latest information, Coinbase is pressuring Judge Katherine Polk Failla to reconsider its request for an interim appeal, citing the SEC’s recent appeal in the Ripple case as further evidence of the need for judicial clarity.
The cryptocurrency exchange argues that ongoing uncertainty regarding the application of the Howey Test to secondary market sales requires a higher court to step in.
Coinbase said in a letter to the court that the SEC’s Ripple appeal highlights confusion surrounding the Howey Test, a legal standard used in a 1946 Supreme Court decision to determine what qualifies as a security. Coinbase’s lawyers argue that resolving this issue is critical, given the conflicting opinions from Congress, Senators, and regulators. “The fact that Congressmen, Senators, and regulators are divided in answering the question underscores the difficulty of the issue, and the different judicial decisions illustrate this point,” the letter said.
Coinbase first filed a preliminary appeal in April, asking the Second Circuit Court of Appeals to address a fundamental question: how the Howey Test applies to digital assets. Appeals are rarely accepted before a case has reached a final decision. However, MetaLawMan, a prominent legal commentator, noted that the SEC’s recent appeal in the Ripple case strengthened its argument for Coinbase’s appeal to be considered.
The SEC responded in May with a letter urging Judge Failla to dismiss Coinbase’s appeal, arguing that there was “no substantial basis for disagreement,” but the judge has yet to rule. Now, while the SEC’s Ripple appeal continues, Coinbase is once again pushing for a review of its own case. According to Coinbase, filing both lawsuits simultaneously with the Second Circuit Court would give the court a more comprehensive view of the legal and practical implications of the SEC’s stance on regulating digital assets.
*This is not investment advice.
