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Coinbase Global Inc., a prominent U.S.-based crypto exchange, achieved a significant legal victory in its ongoing dispute with the U.S. Securities and Exchange Commission (SEC). Chief Legal Officer Paul Grewal confirmed that Judge Catherine Polk Failla approved Coinbase’s request for an interlocutory appeal, marking a key development in the case.
The legal battle centers on allegations by the SEC that Coinbase enabled trading in crypto assets deemed as securities. The recent decision allows the crypto exchange‘s case to proceed to the Second Circuit Court of Appeals, temporarily halting all proceedings in the current court. Revealing the update, Grewal wrote on X, “Over the strenuous objection of SEC, Judge Failla has GRANTED our motion for leave to pursue an interlocutory appeal and STAYED the district court litigation. We appreciate the Court’s careful consideration. On to the Second Circuit we go.”
Court Revisits Howey Test Application in Coinbase SEC Lawsuit
This appeal represents a turning point, as Judge Failla had previously ruled against Coinbase in a preliminary judgment issued on March 27, 2024. That earlier decision relied on the Howey Test, a legal standard for identifying investment contracts. The exchange challenged the interpretation, arguing that it was not applicable to the assets on its platform.
Following objections from Coinbase, the court granted an extended discovery period to address these concerns. With the interlocutory appeal now approved, the case will advance to the appellate court in the coming weeks.
Over the strenuous objection of @SECGov, Judge Failla has GRANTED our motion for leave to pursue an interlocutory appeal and STAYED the district court litigation. We appreciate the Court’s careful consideration. On to the Second Circuit we go. pic.twitter.com/FuZ2jcYvfF
— paulgrewal.eth (@iampaulgrewal) January 7, 2025
Coinbase’s legal confrontations extend beyond the SEC. In a separate matter, the exchange recently prevailed in a case against the Federal Deposit Insurance Corporation (FDIC). This lawsuit, based on the Freedom of Information Act (FOIA), sought to uncover FDIC documents related to allegations of regulatory overreach.
The findings revealed attempts by the FDIC to suppress Bitcoin transactions within the U.S. banking sector, supporting the exchange’s claims of undue interference.
Advocacy & Legal Initiatives
Coinbase’s proactive stance against federal agencies reflects its broader mission to influence crypto policy. The company has filed multiple amicus briefs in support of legal challenges to the SEC’s regulatory framework.
Additionally, Coinbase has emerged as a key supporter of the pro-crypto Super PAC Fairshake, which played a notable role in recent U.S. elections. CEO Brian Armstrong has also been vocal in his opposition to certain SEC officials, including Commissioner Caroline Crenshaw, whom he accused of having an anti-crypto stance. Armstrong’s advocacy contributed to the cancellation of Crenshaw’s Senate confirmation hearing.