In June 2023, the SEC sued Coinbase, accusing the crypto exchange of selling unregistered securities. Now, Coinbase is urging a New York judge to reconsider an interlocutory appeal it filed in April 2024, using the SEC’s appeal in the Ripple case to strengthen its argument.
In an Oct. 5 letter, Coinbase’s legal team argued that the SEC’s appeal in Ripple shows ambiguity in the application of the Howey Test—the criteria used to determine whether an asset is a security. Coinbase claims this issue affects the entire industry, requiring further legal review.
The exchange’s lawyers emphasized the urgent need for appellate review, stating that the SEC’s actions in the Ripple case confirm the far-reaching implications of the Howey Test’s application to digital assets. They argue that the SEC’s handling of these cases reflects the lack of clear guidelines for classifying digital assets.
As of October 2024, the court has not yet ruled on Coinbase’s request for an appeal, and the SEC has requested more time for discovery. Coinbase is also pressing the Commodities Futures Trading Commission (CFTC) for communications with token issuers to clarify which assets fall under securities regulation.