George Miller
Coinbase Global Inc., a leading cryptocurrency exchange located in the United States, recently celebrated a crucial legal win in its battle against the U.S. Securities and Exchange Commission (SEC). Chief Legal Officer Paul Grewal announced that Judge Catherine Polk Failla has given the green light for Coinbase to pursue an interlocutory appeal, a significant step forward in the ongoing case.
This legal conflict arises from accusations by the SEC that Coinbase has facilitated trading in crypto assets classified as securities. The recent ruling allows Coinbase’s case to move to the Second Circuit Court of Appeals, thus pausing ongoing court procedures. Grewal shared the news on X, stating, “Over the strenuous objection of SEC, Judge Failla has GRANTED our motion for leave to pursue an interlocutory appeal and STAYED the district court litigation. We appreciate the Court’s careful consideration. On to the Second Circuit we go.”
Revisiting the Howey Test in Coinbase’s SEC Case
This appeal signifies an important moment, especially since Judge Failla had initially ruled unfavorably against Coinbase in an early judgment dated March 27, 2024. That decision referenced the Howey Test, a legal benchmark for defining investment contracts. Coinbase contended that this interpretation did not apply to the digital assets available on its platform.
In response to Coinbase’s concerns, the court allowed an expanded discovery timeframe. With this appeal now authorized, the case is set to progress to the appellate court in the near future.
Over the strenuous objection of @SECGov, Judge Failla has GRANTED our motion for leave to pursue an interlocutory appeal and STAYED the district court litigation. We appreciate the Court’s careful consideration. On to the Second Circuit we go. pic.twitter.com/FuZ2jcYvfF
— paulgrewal.eth (@iampaulgrewal) January 7, 2025
Coinbase’s legal issues are not solely with the SEC; the exchange recently won a case against the Federal Deposit Insurance Corporation (FDIC). This lawsuit, rooted in the Freedom of Information Act (FOIA), aimed to obtain FDIC documents regarding claims of regulatory overreach.
The outcomes indicated efforts by the FDIC to inhibit Bitcoin transactions within the U.S. banking system, bolstering Coinbase’s assertions of improper interference.
Legal Advocacy and Initiatives
Coinbase is actively pushing back against federal agencies as part of its mission to shape cryptocurrency regulations. The company has submitted several amicus briefs supporting legal actions against the SEC’s regulatory approach.
Moreover, Coinbase has become a significant ally of the pro-crypto Super PAC Fairshake, which has made an impact in recent U.S. elections. CEO Brian Armstrong has been outspoken in his opposition to specific SEC officials, particularly Commissioner Caroline Crenshaw, whom he has accused of harboring an anti-crypto bias. Armstrong’s efforts were instrumental in halting Crenshaw’s Senate confirmation hearing.