Coinbase urges court to reconsider appeal, cites SEC vs Ripple
Coinbase's attorneys urged New York's Southern District Judge Catherine Falia to reconsider an April 2024 interlocutory appeal filed on behalf of the exchange — citing the Securities and Exchange Commission's (SEC) latest notice of appeal in the Ripple case.
According to the October 5 letter, Coinbase's lawyers said that the SEC's appeal is to accept the requirements set out in the regulator's Hawaii test – all the conditions that must be met to classify a financial instrument as a security – ambiguous and warrant close scrutiny.
Coinbase's lawyers will first send a letter to the court asking for approval of the interlocutory appeal filed in April 2024. Source: Eleanor Terrett.
The attorneys also noted that the appeal represents the “industry-wide significance” of the application of the Hawaii test, which is the subject of the ongoing Securities and Exchange Commission vs. Coinbase Inc. And warrant a more thorough legal review of the facts in the Coinbase Global lawsuit. Coinbase's legal counsel emphasized:
“The SEC has acknowledged, and now reaffirmed its appeal in Ripple, that the issues raised by Howie's application for secondary market digital asset transactions are of “industry-wide significance”. A swift and thorough review of the appeal is urgently needed.”
Financial services attorney James Murphy said it was unusual for the court not to rule on Coinbase's appeal when it was filed in April — noting that such appeals are usually settled in arbitration. The lawyer praised the strategy of the legal team in the recent SEC appeal in the case of Ripple to push the appeal of the interview.
Related: Coinbase to cancel stablecoins that don't comply with EU MCA rules
In SEC vs. Other recent developments in Coinbase
In a Sept. 18 filing, the Securities and Exchange Commission asked the court to grant Coinbase an extension until February 2025 to produce discovery documents. The documents were originally scheduled to appear in court by October 18, 2024.
On September 24, a group of judges stated that the SEC's refusal to provide clear rules and regulations for digital assets – the exchange's request to the government regulator in 2022 – did not have a clear reason.
Recently, in October 2024, Coinbase filed a court petition to compel the Commodity Futures Trading Commission (CFTC) to divest its relationships with token issuers, which Coinbase's legal team believes will provide clarity on how digital assets qualify as securities.
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