Cryptocurrency exchange Coinbase has filed a request with a U.S. court to examine a specific “controlling question” raised by the Securities and Exchange Commission (SEC) in their ongoing lawsuit against the exchange.
In an April 12 filing with the U.S. District Court for the Southern District of New York, Coinbase argued that the question presented is clear of any factual disputes and is ready for immediate review.
Coinbase’s chief legal officer, Paul Grewal, explained in a post on X on April 12 that the “controlling question” revolves around whether an investment contract requires something contractual.
According to the court filing, Coinbase claims that the existence of an “investment contract” is a pure, controlling question of law, even without any post-sale obligations. However, the SEC argues otherwise.
This request comes after U.S. District Judge Katherine Failla rejected Coinbase’s motion to dismiss the SEC’s case against the exchange, which accuses it of operating as an unregistered exchange, broker, and clearing agency.
If the court decides to approve the interlocutory appeal, it could significantly impact the case, which has been ongoing since June 2023. Coinbase states that the SEC considers its crypto transactions as investment contracts, despite the absence of any alleged contractual undertakings.
Grewal emphasized that Coinbase filed the appeal request early, just 17 days after the motion to dismiss was denied. He justified this action by stating its importance to the broader crypto industry and the desire to resolve the dispute over crypto transactions as quickly as possible.
Coinbase recently won a significant victory in a civil lawsuit where plaintiffs claimed that the exchange offered and sold them unregistered securities. The United States Court of Appeals for the Second Circuit ruled in favor of Coinbase on April 6, confirming that secondary sales of cryptocurrencies on its platform do not violate the Securities Exchange Act.