Coinbase’s Motion For Interlocutory Appeal Should Be Rejected, SEC Argues

The US Securities and Alternate Fee (SEC) has responded to Coinbase’s latest movement, because the authorized battle between the regulator and the outstanding cryptocurrency trade heats up. The US-based trade filed an interlocutory attraction in April after a decide denied its request for case dismissal.

In June 2023, the SEC sued Coinbase, the most important crypto trade by buying and selling quantity in america, for working as an unregistered securities trade, dealer, and clearing company. Within the newest improvement, the SEC has requested the courtroom to not permit the trade to attraction.

No Substantial Floor For Distinction In Opinion: SEC

On Friday, Could 10, the Securities and Alternate Fee submitted its response to Coinbase’s latest interlocutory attraction. The US monetary regulator argued that the trade’s movement needs to be denied no matter “which model of the query for certification Coinbase proposes.”

In its movement for an interlocutory attraction, the trade claimed that there’s a “substantial floor for distinction in opinion” concerning the utility of the Howey Check, which is used to find out if an asset qualifies as an funding contract and safety. The SEC addressed this in its submitting, saying:

Extra broadly, it’s clear that Coinbase doesn’t like Howey and the present framework for securities regulation, having determined to rearrange its enterprise affairs in ways in which might make it pricey to adjust to current regulation. However Coinbase’s determination to take action, and its need to rewrite settled, a long time outdated authorized precedent to suit its personal coverage targets and enterprise wants gives no compelling cause to prematurely certify an attraction on this case.

Decide Katherine Polk Failla, who denied Coinbase’s movement to dismiss the SEC’s expenses, should rule on the movement for interlocutory attraction. If she approves the request, then the trade will be capable to ship the movement to the US Courtroom of Appeals for the Second Circuit.

“Let’s Have An Trustworthy Dialog” – Coinbase CLO Responds

Paul Grewal, Coinbase’s chief authorized officer (CLO), took to the X platform to sort out the SEC’s response to the interlocutory attraction movement. Grewal referred to as out the regulatory company for contradicting its authorized arguments in comparable circumstances.

Immediately @SECGov filed its response to our request to file an interlocutory attraction with the 2nd Cir. The Fee could not assist contradicting its personal arguments for a similar sort of attraction in Ripple. This is simply instance–examine what they mentioned earlier than to what they are saying now. 1/3 pic.twitter.com/LkbXefV07N

— paulgrewal.eth (@iampaulgrewal) May 10, 2024

Particularly, the CLO highlighted the variations within the SEC’s argument in an identical attraction in its case in opposition to Ripple. Grewal added: 

Let’s no less than have an sincere dialog. Neglect a few cut up throughout businesses, circuits and elsewhere. There’s not even a consensus about Howey and digital belongings among the many district judges in the identical courthouse at Foley Sq..

Whereas this newest movement and a possible interlocutory attraction would possibly show pivotal on this authorized showdown, it stays to be seen how this case will play out. Furthermore, the US SEC and Coinbase produce other ongoing courtroom battles, most notably the trade’s lawsuit in opposition to the fee for failing to supply regulatory readability.

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