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- Judge Failla has granted Coinbase an interlocutory appeal, allowing it to challenge the SEC’s claims at the Second Circuit Court of Appeals.
- The appeal raises significant questions about the application of securities law to digital assets, particularly in relation to the Howey test.
Coinbase has reached a significant legal milestone in its ongoing battle with the SEC, as Judge Katherine Polk Failla of the Southern District of New York granted the company a rare interlocutory appeal.
According to the filingThis decision allows Coinbase to take its case to the Second Circuit Court of Appeals.
The company will challenge the SEC’s allegations, including claims to operate as an unregistered exchange and broker-dealer.
In addition, the SEC accuses Coinbase of selling unregistered securities through its betting program.
“Over the vigorous objection of the SEC, Judge Failla granted our motion for leave to pursue an interlocutory appeal and stayed the district court litigation,” said Paul Grewal, Coinbase’s chief legal officer, on platform X.
Judge Failla found that the appeal raises fundamental questions about whether digital asset transactions on Coinbase qualify as “investment contracts” under securities law, as defined by the Howey test.
The court indicated that guidance from the Second Circuit could significantly advance the resolution of the case.
Fox Business News reporter Eleanor Terrett called the decision “a major legal victory for Coinbase,” noting the unusual nature of such an appeal.
