- Coinbase can now seek guidance from the Second Circuit Court of Appeals to determine if the SEC’s complaints against it are valid
- The SEC first filed a complaint against Coinbase in 2023, arguing that it operated as an unregistered brokerage in violation of federal securities laws
Coinbase has been granted an interlocutory appeal, temporarily pausing its ongoing court case against the US Securities and Exchange Commission (SEC).
According to a filing, Judge Katherine Polk Failla of the Southern District of New York granted the crypto exchange’s motion.
Filing a complaint on June 6, 2023, the SEC argued that Coinbase amounted “to the operation of an unregistered brokerage, exchange, and clearing agency in violation of federal securities laws.”
This latest filing means Coinbase can now proceed to the Second Circuit Court of Appeals to receive guidance and to determine if the SEC’s complaints against it are valid.
Taking to X, Paul Grewal, Coinbase’s chief legal officer, wrote: “Over the strenuous objection of @SECGov, Judge Failla has GRANTED our motion for leave to pursue an interlocutory appeal and STAYED the district court litigation. We appreciate the Court’s careful consideration. On to the Second Circuit we go.”
Over the strenuous objection of @SECGov, Judge Failla has GRANTED our motion for leave to pursue an interlocutory appeal and STAYED the district court litigation. We appreciate the Court’s careful consideration. On to the Second Circuit we go. pic.twitter.com/FuZ2jcYvfF
— paulgrewal.eth (@iampaulgrewal) January 7, 2025
The SEC vs. Coinbase
With this latest motion, it seems the back and forth between the two may finally be coming to an end.
Following the 2023 SEC complaint, Coinbase filed its answer in late June seeking to dismiss the lawsuit for lack of merit.
In a 177-page report, Coinbase argued that the SEC’s accusations were based on claims that 12 of the listed crypto tokens trading on the exchange were securities. However, when the SEC authorized Coinbase to go public, six of the 12 crypto assets were already trading.
As a result, Coinbase claimed that the lawsuit should be dismissed because the agency didn’t classify any of the crypto assets as securities.
In December 2023, the SEC denied a rulemaking petition by Coinbase. According to SEC Chair Gary Gensler, “existing laws and regulations apply to the crypto securities markets.” However, SEC Commissioners Hester Peirce and Mark Uyeda said they “disagree with the Commission’s decision.”
This was followed by a March report that Judge Failla ruled that the SEC’s case against Coinbase would move forward on most of the claims against it, denying the exchange’s motion to dismiss the case.
In September, the SEC then filed a motion for an extension from the court giving it more time to provide Coinbase with key documents. More recently, Coinbase pushed for court intervention to obtain SEC documents on how securities laws apply to cryptocurrencies.
Now, with the latest judge ruling, this is a “big legal win” for Coinbase, according to Fox Business News reporter Eleanor Terrett.
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