Coinbase Secures Major Legal Win Against SEC
In a significant development, U.S.-based cryptocurrency exchange giant Coinbase has secured a major legal victory in its longstanding battle with the Securities and Exchange Commission (SEC). The exchange has been granted permission to pursue an interlocutory appeal, effectively pausing district court litigation.
Interlocutory Appeal Granted
U.S. District Judge Katharine Polk Failla approved the interlocutory appeal, citing that it “presents a controlling question of law” regarding the application of the Howey test to cryptocurrencies. The judge noted that there is “substantial ground” for difference of opinion, necessitating the guidance of the Court of Appeals for the Second Circuit. Paul Grewal, chief legal officer at Coinbase, welcomed the ruling, stating, “We appreciate the Court’s careful consideration. On to the Second Circuit we go.”
Implications of the Ruling
According to Judge Failla, an immediate interlocutory appeal would “materially advance” the termination of the litigation, as a substantial portion of the SEC’s claims against Coinbase might be dismissed. Jeremy Hogan, partner at Hogan & Hogan, highlighted that the granting of such an interlocutory appeal is “rare.” The litigation proceedings will be paused until the appellate court rules on whether an “investment contract” requires an actual contract, a key point of contention in the Ripple appeal.
Industry Reaction
The news has been met with enthusiasm from the cryptocurrency community, with Marco Santori, chief legal officer at Kraken, congratulating the Coinbase Legal Team on social media. “Huge congratulations to the Coinbase Legal Team. Not only will the Second Circuit consider dismissing the SEC’s case, but the trial court will pause it in the meantime. Big win for the whole ecosystem,” he said.
Market Impact
Despite the legal win, Coinbase’s stock (COIN) has declined by over 8% amid a severe crypto market crash. The ruling’s long-term implications for the cryptocurrency industry remain to be seen.
Conclusion
In summary, Coinbase has secured a significant legal victory against the SEC, with the court granting an interlocutory appeal and pausing district court litigation. The ruling has been welcomed by the cryptocurrency community, with many seeing it as a positive development for the industry. However, the market impact has been muted, with Coinbase’s stock declining amid a broader crypto market downturn.
Source: Bitcoinethereumnews.com
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