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XRP, on the latest developments in the SEC’s lawsuit against Coinbase, as a federal judge granted the exchange’s temporary appeal request.
In a stunning development, U.S. District Judge Katherine Polk Failla granted Coinbase a request to continue a temporary appeal in its lawsuit against the SEC. The judge stayed the remainder of the case until the Second Circuit considers the temporary appeal.
As is customary, Coinbase’s chief legal officer Paul Grewal brought this development to the public’s attention in a post on X yesterday. Grewal expressed his gratitude to the court for granting the exchange’s request for leave to proceed with the interim appeal.
Despite strong objection
Coinbase's latest decision
Notably, the interim appeal revolves around whether an investment contract requires an actual contract. The judge suggested that this issue represents a “discretionary legal question” regarding how the Howey Test, a long-standing security test in the United States, applies to crypto assets.
Although the judge criticized Coinbase for distorting the SEC’s regulatory approach to crypto assets, she granted its interim appeal request filed in April 2024.
The judge pointed to conflicting rulings from other federal courts on the issue, stressing the need for guidance from a higher court such as the 2nd Circuit Court of Appeals.
Attorney Hogan's reaction
Commenting on the development, Hogan, the attorney, described the decision as “big news in the legal crypto space.” According to him, the issue of whether an investment contract requires an actual contract is also a point of contention in Ripple’s appeal. The full case is expected to begin later this month.
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Hogan said it was rare for a district judge to grant a temporary appeal. He said the decision reflected the judge's belief that "something is up."
This indicates that the judge believes that the question of whether an investment contract requires an actual contract deserves immediate review by a higher court.
A federal judge denied the SEC's request for an interim appeal in the Ripple lawsuit in October.
