Coinbase files second appeal! The court requested that the SEC's complaint be dismissed after the first appeal was dismissed at the end of the month. Last March
Paul Grewal, chief legal officer at Coinbase, said the company has filed a motion with the US Court of Appeals for the Second Circuit to dismiss the case. The SEC despite rejecting the first round of applications on March 27. If successful, this could lead to the suspension of the ongoing trial in the court of first instance.
The appeal comes after the US Securities and Exchange Commission filed a lawsuit against Coinbase in June 2023, alleging multiple violations of securities law. Including failure to register as a trading centre, broker or clearing house for trading digital assets as well as offering and selling securities outside the system through staking services.
This round of Coinbase's filing focuses on whether trading digital assets without after-sales obligations can be considered “cryptocurrency trading.” Is the Investment Contract subject to SEC rules? This issue is very important and will have a wide impact on the digital assets industry. Therefore, a clear decision from the Supreme Court is needed to end the uncertainty.
Coinbase notes that the definition of the word “investment contract” consistent with prior rulings issued over the past 90 years must also include an element of post-sale obligations. But the US Securities and Exchange Commission instead tried a new interpretation, stating that simply integrating digital assets into the token ecosystem could be considered an investment contract. There is no need to consider whether there are after-sales obligations or not.
Applying Howey's rules to digital asset transactions leads to very different interpretations. House members, senators and organizers reflected on the complexity of the issue and the various legislative outcomes.
source: cryptobriefing assets.ctfassets
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