Coinbase, SEC spar trial of appeal over investment definition
Coinbase has leaned heavily on its recent lawsuit against the United States Securities and Exchange Commission (SEC) and reached an unusual conclusion: “The SEC wants to step aside. [Howey] challenge”
Coinbase filed a memorandum on May 24 in support of an appeal of a ruling in the ongoing case. The document is in response to the SEC's objection to the first request for such an appeal. Coinbase filed an interlocutory appeal against the March 27 ruling.
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Coinbase said the controlling question in the SEC lawsuit (primarily the main issue and an important part of the interlocutory appeal) is whether the investment contract requires a contractual agreement. The SEC argued in its memorandum opposing Coinbase's first interlocutory appeal that no court was required to apply the post-sale settlement agreement to Hawaii. In a May 24 filing, Coinbase responded:
“SEC ignores the fact that there has been no appellate court for the past 78 years. [the Supreme Court ruling that established the] Howie [test] After the sale, he got an investment contract with no contractual agreement.
That, in turn, leaves the issue ripe for a court decision and not “an inevitable application of established law,” Coinbase said. He also found the SEC's claims against Ripple inconsistent with those in the Coinbase case, and noted that the House of Representatives passed a bill a few days ago that would “deny the SEC's purported broad jurisdiction.”
The SEC filed a lawsuit against Coinbase in June 2023, alleging violations of securities laws. In addition to the claims about the staking program, the SEC said the 13 cryptocurrencies it listed were securities.
Coinbase has been very active in defending itself and the crypto industry. After the SEC lawsuit was filed in June, he launched a stand-up campaign against crypto that now includes a political action committee.
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