Coinbase Inc. has an unusual chance to skip a U.S. federal court dispute with the Securities and Exchange Commission (SEC) after a judge grants the company's request for a narrow appeal of regulators' charges related to trading in virtual currency securities. was given.
U.S. digital asset exchange has the U.S. Court of Appeals for the Second Circuit granting its appeal, agreeing that the SEC's accusation that Coinbase mishandled trades in unregistered securities was wrong. If possible, such a decision would reverberate throughout the broader crypto industry. industry.
Judge Katherine Polk Failla of the United States District Court for the Southern District of New York issued the following decision on Tuesday: Approve the request from Coinbase Asking a higher court to consider one of the central issues in the dispute, a process known as interlocutory appeal. The rest of the lawsuit will then be left alone while Coinbase pursues the matter.
Failla said he did not appreciate the company's “efforts to challenge the SEC's approach to crypto assets,” but noted the inconsistencies in different federal court rulings on similar issues, saying that “decisions on important legal issues are “It's a contradiction,” he said. Guidance from the Second Circuit is needed. ”
A legal clash between U.S. securities regulators and major U.S. crypto exchanges centers on whether certain tokens traded on their platforms should be considered securities and therefore a violation of the law. It is.
Coinbase notes that, among other things, issuers of crypto tokens traded on its secondary market have no obligations to purchasers, so the tokens do not check the legal standard box for them to be securities. He claims no. It's called the Howie test.
The judge said she was granting the April 2024 request because it “raises governing questions of law regarding the scope and application of Howie to cryptoassets, about which there is disagreement. This is because there are substantial grounds to do so, and its resolution will move forward with the final trial.” Termination of SEC Enforcement Action. ”
“We appreciate the court's careful consideration,” said Paul Grewal, Coinbase's chief legal officer. Post on social media site X. “I'm going to the second circuit.”
Read more: Coinbase takes on US SEC to resolve key questions about cryptocurrencies
Cryptocurrency skeptic Gary Gensler will remain at the helm until he steps down as chairman at President-elect Donald Trump's inauguration on January 20, an SEC spokesperson said in commenting on the latest ruling. I refrained from
Ultimately, this case and other legal disputes over what constitutes a cryptocurrency security could end up before the Supreme Court, but it will also define how the asset and its trading should be regulated in the United States. If a new law is passed by Congress, it will ultimately become meaningless. It's an Industry Thing aims to focus on steering this year's new Congress toward more industry-friendly legislation through political action and lobbying.
The SEC leadership is also moving under Republican control, which will likely mean greater openness to the crypto industry. A new agency chair could change course on enforcement actions, including this lawsuit.
