Coinatory Publisher
The Securities and Exchange Commission (SEC) has given Coinbase, the biggest cryptocurrency exchange in the US, a crucial chance to refute allegations. The Southern District of New York’s Judge Katherine Polk Failla granted the company’s request for an interlocutory appeal, halting the current case to resolve important legal issues.
Coinbase can contest whether the SEC’s claims are consistent with current securities regulations through the interlocutory appeal. The matter is now before the Second Circuit Court of Appeals, which will evaluate the regulatory body that oversees Coinbase’s business practices.
Coinbase is accused by the SEC of operating as an unregistered exchange and broker-dealer, facilitating financial services and trades without the required licenses. Furthermore, according to the regulator, Coinbase marketed unregistered securities through its staking program, which allows users to lock cryptocurrency in order to support blockchain networks and collect incentives.
The main question in the appeal is whether, in accordance with the Howey Test, a legal framework that defines securities, digital assets traded on Coinbase are considered investment contracts. A decision in favor of Coinbase might set important precedents for the cryptocurrency sector and make it clearer how securities rules relate to digital assets.
Eleanor Terrett, a journalist for Fox Business, described the appeal as a “big win” for Coinbase, pointing out that it is uncommon in cases like this. The case’s verdict might affect how cryptocurrency platforms are regulated in the future and possibly mold the US legal system’s overall framework for digital assets.
The sector awaits the appellate court’s ruling in the SEC case, which has been put on hold. The ruling could have a significant effect on the legal landscape for cryptocurrency exchanges across the country.
