A US judge has temporarily halted proceedings in the legal case between Coinbase and the SEC, allowing the crypto exchange to seek a higher court’s opinion on a pivotal legal question.

On January 7, District Judge Katherine Polk Failla approved Coinbase’s request to appeal a critical issue to an appellate court. 

The Coinbase Vs SEC Legal Battle Will Set Precedent for the US Crypto Industry

The appeal will address whether certain digital assets traded on Coinbase qualify as securities. It will also clarify if transactions involving these assets require an investment contract under the Howey test. 

Most importantly, the case proceedings will remain on hold until the appeal is resolved.

“Over the strenuous objection of the SEC, Judge Failla has granted our motion for leave to pursue an interlocutory appeal and stayed the district court litigation.  We appreciate the Court’s careful consideration. On to the Second Circuit we go,” wrote Coinbase Chief Legal Officer Paul Grewal. 

Coinbase has maintained that the tokens traded on its platform do not meet the legal criteria for securities. The company argues that token issuers do not owe obligations to buyers, failing to satisfy the Howey test’s definition of a security.

Also, judge Failla acknowledged this contention. She stated that the legal question presents substantial grounds for differing opinions. Resolving this issue could expedite the conclusion of the SEC’s enforcement action.

The decision comes at a pivotal moment for the crypto sector. The incoming administration of President-elect Go to Source to See Full Article
Author: Mohammad Shahid