In a significant development in the ongoing legal battle between Coinbase and the Securities and Exchange Commission (SEC), Coinbase Chief Legal Officer Paul Grewal announced that the court has granted their motion for an interlocutory appeal. This decision effectively pauses the current district court proceedings and allows Coinbase to take its case to the Second Circuit Court of Appeals.
Grewal shared the news via a social media post, stating, “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.”
This ruling represents a notable win for the cryptocurrency exchange. Cryptocurrency journalist Eleanor Terrett characterized the decision as a “big legal win,” highlighting the rarity of such interlocutory appeals being granted.
Terrett further explained the implications of the ruling: “Judge Failla has granted the company a very rare interlocutory appeal which means she’s allowing Coinbase to leave to make a request to the Second Circuit appealing the SEC’s assertions that the company is violating federal securities laws by operating as an unregistered exchange and broker-dealer as well as engaging in the illegal sale of unregistered securities through its staking program. Further, Failla says the district court proceedings will be halted in the meantime.”
The core of the SEC’s case revolves around allegations that Coinbase is operating as an unregistered exchange and broker-dealer, and that its staking program constitutes the sale of unregistered securities. This interlocutory appeal allows Coinbase to challenge these assertions before the Second Circuit before the district court case proceeds.
This move shifts the battleground to the Second Circuit, where Coinbase will seek to overturn the SEC’s claims.
