Coinbase Seeks to Take Core Question in U.S. SEC Case to Higher Court

Coinbase has taken a unique approach in its legal battle with the U.S. Securities and Exchange Commission (SEC) by filing an interlocutory appeal. The appeal focuses on the core question of whether a digital asset transaction, without any obligation to the original issuer, should be considered an investment contract regulated by the SEC. This move by Coinbase aims to address the impasse in the crypto industry’s fight with the SEC, even as the broader case proceeds through the judicial system. The appeal has been filed with the U.S. Court of Appeals for the Second Circuit, though it is important to note that such appeals are often considered longshots. If the appeal is granted, it could potentially lead to a U.S. Supreme Court ruling, offering a definitive resolution to the matter. The classification of digital assets as securities and their regulation by the SEC has been a major point of contention in the crypto sector, with Coinbase and others arguing that once an asset is disconnected from its issuer and enters secondary markets, it should no longer fall under the SEC’s jurisdiction. This question is critical for the U.S. crypto industry and its future direction.