In a notable development in the cryptocurrency industry, Coinbase Global Inc. has secured a key legal victory in its ongoing battle with the U.S. Securities and Exchange Commission (SEC). Judge Catherine Polk Failla has granted Coinbase's request for an interlocutory appeal, temporarily halting the district court proceedings.
The case stems from SEC allegations that Coinbase operated as an unregistered exchange and broker-dealer while offering unregistered securities through its staking program. The SEC's charges specifically focus on the trading of crypto assets that the agency considers securities.
Paul Grewal, Coinbase's Chief Legal Officer, announced the ruling on social media platform X, stating that despite strong objections from the SEC, the court approved their motion. The case will now advance to the Second Circuit Court of Appeals, with proceedings expected to begin in January.
This legal development marks a departure from an earlier ruling that dismissed Coinbase's argument that its assets do not qualify as investment contracts. The pause in district court proceedings while the appeal is under review provides Coinbase with an opportunity to challenge the SEC's interpretation of cryptocurrency regulations.
The approval of an interlocutory appeal, which is rarely granted, allows Coinbase to seek review from a higher court before the original case concludes. This decision adds to Coinbase's recent legal successes, including a victory in a separate lawsuit against the Federal Deposit Insurance Corporation (FDIC) regarding document requests under the Freedom of Information Act.
The outcome of this appeal could shape the regulatory landscape for cryptocurrency exchanges and their operations within the United States financial system.