Coinbase can now seek guidance from the Second Circuit Court of Appeals to determine whether the SEC's charges are valid. claimed to be operating as a registered intermediary
Coinbase has been granted an interlocutory appeal, suspending its ongoing litigation with the U.S. Securities and Exchange Commission (SEC).
Judge Catherine Polk Feira of the Southern District of New York granted the virtual currency exchange's motion, according to the filing.
The SEC filed a complaint on June 6, 2023, alleging that Coinbase “operates an unregistered intermediary, exchange, or clearing house in violation of federal securities laws.”
This latest filing means Coinbase can go to the Second Circuit Court of Appeals for guidance and determine whether the SEC's charges are valid.
Paul Grewal, Coinbase's chief legal officer, wrote to X: “Despite @SECGov's strenuous objections, Judge Feira granted our motion for an interlocutory appeal and stayed the district court action. We appreciate the court's careful consideration. We will proceed to the Second Circuit .”
Despite @SECGov's fierce opposition, Judge Feira granted our motion for an interlocutory appeal and stayed the district court action. We appreciate the court's careful consideration. Head to the second circuit. pic.twitter.com/FuZ2jcYvfF
— paulgrewal.eth (@iampaulgrewal) January 7, 2025
SEC vs Coinbase
With this latest move, it appears the back-and-forth between the two is finally coming to an end.
In response to the 2023 SEC complaint, Coinbase filed a response in late June asking for the lawsuit to be dismissed as lacking merit.
Coinbase claimed in a 177-page report that the SEC's charges are based on allegations that 12 of the publicly traded crypto tokens traded on the exchange are securities. However, by the time the SEC approved Coinbase's listing, six of the 12 crypto assets were already being traded.
As a result, Coinbase argued that the case should be dismissed because authorities do not classify crypto assets as securities.
In December 2023, the SEC denied a rulemaking petition by Coinbase. According to SEC Chairman Gary Gensler, “existing laws and regulations apply to the crypto securities market.” However, SEC Commissioners Hester Peirce and Mark Ueda said they “disagree with the Commission's decision.”
This followed reports in March that Judge Failla had ruled that the SEC's lawsuit against Coinbase would move forward on most of the claims against the company, denying the exchange's motion to dismiss the case. It continued.
Then, in September, the SEC filed a motion with the court asking for an extension to give Coinbase time to provide important documents. Most recently, Coinbase sought court intervention to obtain SEC documents regarding how securities laws apply to cryptocurrencies.
According to Fox Business News reporter Eleanor Terret, the latest judge's ruling is a “huge legal victory” for Coinbase.
