Coinbase Requests Interlocutory Appeal Amid SEC’s ‘Controlling Question’ Dispute

• Coinbase argued in a filing with the U.S. District Court for the Southern District of New York.
• The case has been proceeding since June 2023 between Coinbase and SEC.

Crypto exchange Coinbase has asked a U.S court to review a particular “controlling question” that the SEC brought up in its continuing litigation against the exchange. Coinbase argued in a filing with the U.S. District Court for the Southern District of New York on April 12.

The filing mentioned:

“The question presented here is unencumbered by factual disputes and therefore ripe for immediate review.”

Controlling Question Dispute

In an April 12 post on X, Coinbase’s chief legal officer Paul Grewal said that the “controlling question” concerns the need of “something contractual” in an investment contract. In its court filing, the exchange asserts that the existence of an “investment contract” without any post-sale obligation is a matter of pure law.

The SEC contends that an investment contract does not necessitate contractual responsibilities after the sale, according to Grewal, who expounded on Coinbase’s position.

This follows the denial of Coinbase’s request to dismiss the SEC’s complaint, which accuses the exchange of operating as an unlicensed clearing agency, broker, and exchange, by U.S. District Judge Katherine Failla. Nevertheless, the case, which has been proceeding since June 2023, might be greatly affected if the court chooses to grant the interlocutory appeal.

Grewal brought attention to the fact that Coinbase filed its appeal request just seventeen days after the denial of the motion to dismiss. Nevertheless, he provided an explanation for the move by citing its importance to the crypto sector as a whole, and his goal was to swiftly end the debate over crypto transactions.

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