Coinbase Urges Court to Reconsider Appeal Amid Ripple Case Developments

Recent updates reveal that Coinbase is urging Judge Katherine Polk Failla to rethink its request for an interim appeal.

The cryptocurrency exchange cites the SEC’s recent appeal in the Ripple case as justification for the need for clarity from the judiciary.

Coinbase contends that the ambiguity surrounding the application of the Howey Test to secondary market transactions necessitates intervention from a higher court. In a letter to the court, Coinbase pointed out that the SEC’s Ripple appeal exemplifies the confusion surrounding the Howey Test, a legal standard established by a 1946 Supreme Court ruling to define securities.

The exchange’s legal team emphasizes that resolving this uncertainty is vital due to conflicting views among Congress members, Senators, and regulators. They stated that the division among these groups highlights the complexity of the issue, with varying judicial decisions reflecting this discord.

Coinbase initially filed a preliminary appeal in April, seeking clarification from the Second Circuit Court of Appeals on how the Howey Test applies to digital assets. Appeals are generally not accepted before a case reaches a conclusive ruling. However, legal expert MetaLawMan has noted that the SEC’s recent appeal in the Ripple case could bolster Coinbase’s case for consideration.

In response to Coinbase’s appeal, the SEC submitted a letter in May urging Judge Failla to dismiss the request, asserting there was no significant basis for disagreement. However, a ruling from the judge is still pending. As the SEC’s Ripple appeal progresses, Coinbase is renewing its push for a review of its own situation.

The exchange believes that having both lawsuits addressed simultaneously by the Second Circuit Court would provide a more thorough understanding of the legal and practical implications of the SEC’s approach to regulating digital assets.

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