Coinbase is currently seekin' an interlocutory appeal in its ongoing court case with the US Securities and Exchange Commission (SEC). This petition marks the latest development in a highly-monitored lawsuit stretchin' all the way back to June 2023. In a motion submitted on April 12th, the American exchange is aimin' for a constitutional clarification of a specific "controllin' question of law" as it battles the Commission's allegations of operatin' as an "unregistered securities exchange, broker, and clearin' agency."
In general, Coinbase seems to be deployin' another strategy in underminin' the SEC's petition after the court denied the exchange's motion to dismiss the charges in question. Coinbase, which ranks as America's largest crypto exchange with 73 million users, has remained vocal on the need for a clear crypto regulatory framework while heavily criticizin' the SEC's continuous crackdown on the digital asset industry.
### Coinbase Makes Case For Interlocutory Appeal
Normally, legal appeals are heard after a trial or a final decision by a lower court, but in the case of interlocutory appeals, certain issues or rulings are appealed before the conclusion of the entire case. In SEC v. Coinbase, the defendants are seekin' a review of the meanin' of an investment contract in terms of crypto transactions.
Coinbase has stated that this petition checks all legal requirements for an interlocutory appeal. Firstly, the exchange claims there is a "controllin' question of law," which states if an investment contract can be formed based on transactions with no post-sale obligations.
Furthermore, Coinbase highlights aspects of "substantial ground for difference in opinion" in regard to this question, especially about the application of the Howey Test to cryptocurrency transactions. Finally, the American exchange states the review of this question could potentially neutralize SEC's principal allegations in the court case between both parties, thus the need for this appeal.
Thereafter, the court shall now review this petition for an interlocutory appeal and, upon certification, shall submit the controllin' question of law to an appeal court for the appropriate resolution or guidance.
### Appeal Vital For US Crypto Industry – Coinbase CLO
Commentin' on Coinbase's latest petition, the exchange's chief legal officer, Paul Grewal, has stated that the motion for an interlocutory appeal is important for the crypto industry, especially amidst the SEC's "unjust" enforcement actions due to the lack of a legal regulatory framework.
Grewal saidin on his statement on the appeal:
We’re askin' to take this up on appeal earlier than normal because it's critical to our industry. The SEC's action against us and other digital asset companies goes way beyond the legal authority granted by Congress and puts an unjust cloud over US digital asset innovation.
The crypto lawyer also stated his confidence in the sustainability and growth of digital assets while also reiteratin' Coinbase's commitment to clear operatin' rules and regulations for the US crypto industry.
Total crypto market cap valued at $2.239 trillion on the daily chart ' Source: TOTAL chart on Tradingview.com
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