Paul Grewal, the Chief Legal Officer of Coinbase exchange, declared an appeal against the SEC’s restrictive definition of investment contracts on April 12. In response to that, the SEC has filed its response to the interlocutory appeal request on May 10.
Coinbase and SEC have been engaged in a legal tangle for a long time. SEC sued Coinbase on June 6, 2023, for Operating as an Unregistered Securities Exchange, Broker, and Clearing Agency. Since then, a series of arguments have been passed from both ends. The lawsuit primarily revolved around the question of whether cryptocurrencies traded on Coinbase met the criteria for securities.
A notable twist happened when the ruling issued by the United States Court of Appeals for the Second Circuit determined that such sales do not violate the Securities Exchange Act. A recent development happened when the SEC filed its response to Coinbase’s request to file an interlocutory appeal.
Paul Grewal alleged SEC in X platform has contradictory views to its own opinion, which it stated earlier to what it did to Ripple. He also pointed out the fact that there is a lack of consensus about Howey and digital assets among the district judges in the same courthouse at Foley Square. The legal officer stated,
The Commission couldn’t help contradicting its own arguments for the same kind of appeal in Ripple.
In the response, the SEC stated that Coinbase likes the Howey test and the current regulatory framework. Moreover, the SEC claimed that the business needs to provide no compelling reason to prematurely certify an appeal in this case.Similar to Coinbase, many other major crypto firms like Ripple have also been engaged in a legal tangle. These both cases are closely related through the fact that both Coinbase and Ripple have been arguing regarding investment contracts and securities.
