Ripple ruling boosts Coinbase’s appeal in SEC legal dispute

Coinbase is seeking court approval for an interlocutory appeal in its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC).

The request comes after Coinbase originally filed the motion seven months ago, aiming to have the Appellate Court review the application of the “Howey Test,” a standard for determining whether an asset qualifies as a security.

The SEC has urged the court to deny Coinbase’s appeal, arguing that the company lacks valid grounds for such a request.

However, Coinbase renewed its appeal after the SEC’s recent efforts to contest the Ripple decision, a ruling that the SEC claims contradicts Supreme Court precedents.

In an October 4 letter to Judge Katherine Polk Failla, Coinbase requested the court to certify its interlocutory appeal against the SEC.

If approved, this appeal would allow the Second Circuit Court to address Coinbase’s legal concerns before a final decision is made in the lower court.

Coinbase argues that advancing its appeal alongside the SEC’s would provide a more comprehensive understanding of the SEC’s overall legal strategy.

The exchange contends that the SEC’s litigation approach has caused confusion, with the regulator acknowledging that its stance on the Ripple ruling holds “industry-wide significance.”

Cryptocurrency lawyer James Murphy has commented on Coinbase’s legal strategy, calling it a smart move.

He expressed surprise that the court has yet to rule on the original motion filed in April, given how quickly similar motions are usually addressed.

Murphy believes the SEC’s appeal in the Ripple case could further bolster Coinbase’s argument.

According to Coinbase, the appeal is necessary for clarifying the SEC’s position on the application of the Howey Test in secondary-market digital asset transactions, a point that holds broader implications for the cryptocurrency industry.