On April 12th, Coinbase’s lawyer submitted a request to the court for permission to file an appeal earlier than usual in their ongoing case.
The key issue in question was whether a “investment contract” comes with contractual obligations. According to Coinbase, it does; however, the SEC holds a different view.
A interlocutory appeal refers to the situation when a party decides to challenge a decision made by a trial judge during the ongoing legal proceedings.
Coinbase Fights Back
Paul Grewal, Coinbase’s top lawyer, expressed concern that the SEC’s moves against his company and other crypto businesses exceed their legislative powers, casting an undeserved shadow on American advancements in digital assets.
In June 2023, the Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase, accusing the cryptocurrency exchange of conducting crypto asset trading without registration as a securities exchange and broker-dealer.
Coinbase has asked the court to allow it to appeal an interim ruling in its ongoing case against the SEC regarding the definition of an “investment contract”. According to Coinbase, such a contract necessitates a formal agreement, whereas the SEC holds a differing opinion. 1/5)
— paulgrewal.eth (@iampaulgrewal) April 13, 2024
Coinbase contested the accusations, explaining that based on the Howey test, the digital asset transactions in question should not be considered “investment contracts” since the SEC failed to claim any post-sale responsibilities or commitments from the issuers.
Coinbase is currently challenging the Securities and Exchange Commission (SEC) by arguing that digital asset transactions without any post-sale responsibilities should not be classified as “investment contracts” and therefore exempt from SEC regulation.
Grewal stated that Coinbase’s perspective is shared by the SEC, as they have made similar arguments themselves.
In the Ripple case, the court identified a key legal issue where there’s a strong disagreement among experts, and emphasized that this question carries significant implications for the industry.
In April, the court decided that Coinbase was right in part, stating that users selling cryptocurrencies to each other on their platform did not break the Securities Exchange Act.
War on Crypto Continues
The Securities and Exchange Commission (SEC) continues its crackdown on cryptocurrencies, announcing plans to sue decentralized exchange Uniswap on April 10.
“Uniswap serves as a prime example of cryptocurrency decentralization; instead of praising Hayden Adams as a trailblazing businessman, they’re suing him,” according to Ryan Sean Adams from Bankless.
“A war on crypto is a war on the internet.”
In March, the Securities and Exchange Commission (SEC) issued a subpoena to the Ethereum Foundation as part of an investigation to find out if Ethereum (ETH) should be classified as a security.
Based on the remarks of SEC chairman Gary Gensler, there’s a possibility that Ethereum’s transition to proof-of-stake consensus mechanism could make it subject to SEC regulation as an “investment contract.” Nevertheless, he has not yet clarified this matter definitively when asked.
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2024-04-15 04:15