ChainCatcher message, reported by The Block, that Judge Katherine Polk Failla of the Southern District of New York approved Coinbase's request for an interlocutory appeal on Tuesday, temporarily halting the lawsuit by the Securities and Exchange Commission (SEC) against the exchange. An interlocutory appeal refers to an appeal made before the final ruling by a judge, and such requests are typically rarely granted. The case will next be submitted to the Second Circuit Court of Appeals for review.
Judge Failla noted in her order that the case presents a key legal question regarding the applicability of the Howey test in cryptocurrency assets, a matter with significant disagreement, and its resolution will aid in the final ruling of SEC enforcement actions. She emphasized that due to the 'conflicting authoritative interpretations' of the Howey test in cryptocurrency assets, further clarification from the Second Circuit Court is needed.
Coinbase's Chief Policy Officer Faryar Shirzad stated that this decision is yet another blow to the SEC leadership's attempt to create ongoing uncertainty and chaos, and thanked Judge Failla for allowing the interlocutory appeal.