Coinbase vs. SEC: the dispute over crypto trading as unregistered securities moves to the United States Court of Appeals for the Second Circuit

Coinbase has obtained approval from a federal judge for its request for a special and limited appeal against the charges from the United States Securities and Exchange Commission (SEC).

Coinbase has obtained approval from a federal judge for its request for a special and limited appeal against the charges from the United States Securities and Exchange Commission (SEC). Now the controversy over crypto trading as unregistered securities or not will move to the United States Court of Appeals for the Second Circuit.

In practice, now, the controversy over crypto trading as unregistered securities or not, will move to the United States Court of Appeals for the Second Circuit. In contrast, the rest of the case between Coinbase and the SEC will remain stalled and inactive.

This is a real acceleration on a potential definitive answer to the question of whether some tokens and crypto should be treated as securities.

In fact, if the outcome of the United States Court of Appeals for the Second Circuit were to affirm that the SEC was wrong with its accusations against Coinbase, this would become an echo for the entire cryptocurrency sector.

The judge Failla, approving the move of the case to a trial known as an interlocutory appeal, nevertheless disapproved of some statements by Coinbase.

Here’s what he said:

”[I do not appreciate] the company’s efforts to cast shadows on the SEC’s approach to crypto assets”

In any case, Failla also stated that he welcomes Coinbase’s request for April 2024 for the following reasons:

“because it presents a question of law of fundamental importance regarding the scope and application of Howey to crypto-assets, on which there is a substantial reason for divergence of opinions, and whose resolution would anticipate the definitive conclusion of the SEC’s enforcement action”.

Last October, the CEO of Coinbase, Brian Armstrong, had stated that the next President of the SEC should apologize to the American people for the damage caused to the crypto world.

At that moment, it was not known that Trump was the new elected President of the USA, and that there would be this new opening in favor of the sector.

In any case, for Armstrong, the apologies from the SEC would be the symbol of a ”new beginning” to start the process of restoring trust in the institution.