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Coinbase attorneys are pushing the Southern District of New York to reconsider an interlocutory appeal filed in April 2024. In an Oct. 5 letter, the legal team pointed to the Securities and Exchange Commissionâs (SEC) recent notice of appeal in the high-profile Ripple case.
Coinbaseâs lawyers argued that the SECâs actions signaled ambiguity in the application of the Howey Test, a long-standing legal standard for determining whether an asset qualifies as a security.
The Ripple appeal, they claimed, demonstrates the broader implications of how the Howey Test applies to secondary-market digital asset transactions. In their letter, Coinbaseâs counsel stressed the urgency of a comprehensive appellate review, saying:
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âThe SEC has conceded, and now reconfirms by its appeal in Ripple, that the issues presented by Howeyâs application to secondary-market digital asset transactions are of âindustry-wide significance.’â
Legal Team Pushes for Swift Action
James Murphy, a financial services attorney, noted that it was unusual the court had not yet ruled on Coinbaseâs motion for an interlocutory appeal. Typically, these motions are swift, given their significance in clarifying legal disputes. Murphy praised Coinbaseâs strategy of highlighting the SECâs actions in the Ripple case. It suggested that it could provide momentum for the exchangeâs appeal efforts.
This legal push from Coinbase comes amid a broader struggle with U.S. regulators. The exchange, which has sought clear guidance on digital assets from the SEC since 2022, has become a focal point in the debate over how digital assets should be classified and regulated.
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Ongoing SEC vs. Coinbase Developments
Other recent events in the ongoing SEC vs. Coinbase lawsuit include a petition filed by the SEC in September 2024, requesting an extension until February 2025 to produce discovery documents. Initially, these documents were due in October 2024. In a separate development, a judicial panel criticized the SEC for failing to provide Coinbase with clear guidelines on digital assets.
Moreover, Coinbase recently requested that the court compel the CFTC to release communications with token issuers. This information could help determine which digital assets should be classified as securities, a critical point of contention in Coinbaseâs legal battle with the SEC.
As the court case progresses, the outcome could have sweeping implications for how digital asset transactions are treated under U.S. law.
