Coinbase Presses for a New Appeal Against SEC

Crypto exchange giant Coinbase just filed a motion for an interlocutory appeal in its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC), challenging the agency's authority over certain crypto transactions.

What's the scoop?

• Coinbase has asked for a higher court, the U.S. Court of Appeals for the Second Circuit, to decide if digital asset transactions without post-sale obligations to the original issuer qualify as investment contracts under SEC regulation.
• The move comes on the heels of a judge's rejection of Coinbase's initial attempt to dismiss the SEC's case against it. In that ruling, Judge Katherine Failla said buying a token on a platform involves buying into that token's digital ecosystem, not just the token itself.
• In its new motion, Coinbase pointed to a division between lawmakers and the SEC, particularly following the recent FIT21 vote in the U.S. House of Representatives.
• Ultimately, Coinbase is seeking to challenge whether digital asset transactions not involving formal contracts can be regulated as "investment contracts" by the SEC.

Bankless take

The passing of FIT21 in the House certainly provides ammunition to Coinbase’s motion, which could even extend to Consensys’s ongoing SEC lawsuit as well.

Given that the motion's particular issue is clarifying whether the SEC will regulate digital asset transactions as investment contracts that don’t involve anything contractual, and how the implications of this are huge, it's also hard to imagine that U.S. lawmakers won't be watching this case closely going forward.

In the meantime, only time will tell if Coinbase's new appeal will be heard.