Coinbase has filed an interlocutory appeal against the SEC’s ‘regulatory inquiry’

Cryptocurrency exchange Coinbase has asked the United States District Court to examine a separate “regulatory question” raised by the US Securities and Exchange Commission (SEC) in its ongoing lawsuit against the exchange.

“The question presented here is not limited by factual disputes and is ripe for immediate review,” Coinbase argued in its April 12 filing in the U.S. District Court for the Southern District of New York.

In an April 12 post on X, Coinbase's chief legal officer Paul Grewal said, “The regulatory question revolves around the “object of the contract” as it requires an investment contract.

“Investment contract” whether there can be any obligation after the sale, integrity and control is a legal question, says the court record.

While Grewal maintains that Coinbase's investment contract requires contractual obligations, the SEC argues that it does not.

This comes after U.S. District Judge Catherine Failla denied Coinbase's request to dismiss the SEC's lawsuit against the exchange, which operates as an unregistered exchange, brokerage and clearing agency.

However, if the court decides to approve the interlocutor's appeal, it could have a significant impact on the ongoing case from June 2023.

This is because the SEC has confirmed that Coinbase's crypto transactions are investment contracts “despite no suspected contractual activity,” according to Coinbase.

Reversal on the motion dismisses the SEC's core claims, which are most of the complaint's factual allegations.

It also states that the legal question is controlling if the decision “is likely to have a significant effect on the performance of the act.”

RELATED: Coinbase Cleared of Allegations of Crypto Transactions.

Grewal highlighted that he filed his appeal early, 17 days after it was rejected.

However, he justified the action with its importance to the wider crypto industry, aiming to resolve the dispute over crypto transactions as soon as possible.

“We're asking for this appeal earlier than normal because it's critical to our industry. The SEC's actions against us and other digital asset companies exceed the statutory authority granted by Congress and cast an unfair cloud over American digital asset innovation.

This is after Coinbase won a major victory in a civil lawsuit against the plaintiffs, the exchange offered and sold them unregistered securities.

On April 6, Cointelegraph reported that the United States Court of Appeals for the Second Circuit ruled in favor of Coinbase, confirming that secondary sales of currencies on its platform do not violate the Securities Exchange Act.

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