Key Takeaways
- Coinbase has been granted an interlocutory appeal by Judge Failla, allowing it to challenge SEC’s claims at the Second Circuit Court of Appeals.
- The appeal raises significant questions about the application of securities law to digital assets, particularly concerning the Howey test.
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Coinbase has achieved a significant legal milestone in its ongoing battle with the SEC, as Judge Katherine Polk Failla of the Southern District of New York granted the company a rare interlocutory appeal.
According to the filing, this decision allows Coinbase to bring its case to the Second Circuit Court of Appeals.
The company will challenge the SEC’s allegations, which include claims of operating as an unregistered exchange and broker-dealer.
Additionally, the SEC accuses Coinbase of selling unregistered securities through its staking program.
“Over the strenuous objection of the SEC, Judge Failla has granted our motion for leave to pursue an interlocutory appeal and stayed the district court litigation,” said Paul Grewal, Coinbase’s chief legal officer, on platform X.
Judge Failla determined the appeal raises fundamental questions about whether digital asset transactions on Coinbase qualify as “investment contracts” under securities law, as defined by the Howey test.
The court indicated that guidance from the Second Circuit could substantially advance the case’s resolution.
Fox Business News reporter Eleanor Terrett called the decision “a big legal win for Coinbase,” noting the unusual nature of such an appeal.
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