Coinbase wants court approval for an interlocutory appeal in its ongoing legal battle with the Securities and Exchange Commission (SEC).
This request follows Coinbase’s original filing in April, nearly seven months ago. Coinbase aims to have the Appellate Court review the application of the “Howey Test,” a critical standard for determining securities classification.
Coinbase Request Interlocutory Appeal
In response, the SEC urged the court to deny the appeal, arguing that Coinbase lacks valid grounds for its request. Judge Failla has yet to make a decision on the initial request.
However, Coinbase has renewed its appeal following the SEC’s recent move to contest the Ripple decision. The regulator argued that the ruling contradicts Supreme Court precedents and securities regulations.
In an October 4 letter to Judge Katherine Polk Failla, Coinbase urged the court to approve its motion to certify an interlocutory appeal against the SEC. If granted, this would allow the Second Circuit to address Coinbase’s legal concerns before the lower court makes a final decision.
Coinbase argued that its own appeal should proceed to the Second Circuit simultaneously with the SEC’s appeal. According to the exchange, this alignment would provide the court with a more comprehensive view of the SEC’s legal strategy.
The exchange argues that granting its request for an interlocutory appeal would ensure that the Second Circuit fully understands the SEC’s litigation approach. According to the firm, this is essential since the SEC recently acknowledged that its position has caused “confusion.”
“The SEC has conceded, and now reconfirms by its appeal in Ripple, that the issues presented by Howey’s application to secondary-market digital asset transactions are of ‘industry-wide significance,'” Coinbase argued.
Cryptocurrency lawyer James Murphy called Coinbase’s legal strategy a smart move. He expressed surprise that the court has yet to rule on the original motion, given how quickly similar motions are typically approved. However, Murphy believes that the SEC’s appeal in the Ripple case could strengthen Coinbase’s argument going forward.
“It is astounding that Judge Failla never ruled on Coinbase’s original motion for interlocutory appeal filed back in April. Those motions are normally ruled on very quickly. The SEC’s appeal in Ripple just strengthened Coinbase’s argument,” Murphy stated.