SEC Blocks Coinbase’s (COIN) Move for Howey Test Clarification: A Major Setback for Crypto Industry

  • The SEC has filed a motion to halt Coinbase’s appeal in the ongoing litigation.
  • Coinbase had requested permission to ask the Second Circuit Court of Appeals about the applicability of the Howey Test to digital assets.
  • The SEC accuses Coinbase of operating as an unregistered broker, exchange, and clearinghouse in the U.S.

The SEC has moved to halt Coinbase’s appeal in the ongoing litigation, questioning the crypto exchange’s application of the Howey Test to digital assets. This development underscores the ongoing tension between regulatory bodies and cryptocurrency platforms.

SEC Moves to Halt Coinbase’s Appeal

The U.S. Securities and Exchange Commission (SEC) has filed a motion to stop Coinbase’s appeal to the court in the ongoing litigation. The crypto exchange had applied for permission to ask the Second Circuit Court of Appeals if the Howey Test, a test created by the Supreme Court to determine whether certain transactions qualify as “investment contracts,” should apply to digital assets.

The Howey Test and Cryptocurrencies

The SEC’s stand revolves around the assertion that some cryptocurrencies are securities and, as such, would meet the Howey Test. This would require Coinbase to obtain the SEC’s approval before making these cryptocurrencies available for customers to trade. Coinbase, however, accuses the SEC of attempting to create a “new legal test” that would fit cryptocurrencies into existing securities precedent, a move already resisted by a district judge.

SEC’s Counterarguments

The SEC argues that Coinbase has not successfully argued that an appeal is necessary. It points out that Coinbase has not proved there was a “controlling question” in its original filing. The SEC also notes a disjointed argument in Coinbase’s filing, citing the crypto exchange’s claim of focusing on a specific legal question about “contractual obligations.” According to the SEC, Coinbase’s argument about the application of Howey to crypto is an entirely different question altogether.

Conclusion

The SEC’s countermotion to Coinbase’s request to appeal underscores the ongoing tension between cryptocurrency platforms and regulatory bodies. The final decision now lies with Judge Katherine Polk Failla, who is overseeing the case. If Failla sides with Coinbase, the crypto exchange will proceed to send the motion to the appeals court, potentially setting a precedent for future cryptocurrency regulation.

BREAKING NEWS

Jupiter to hold crucial governance vote on whether to burn 121 million JUP tokens that have been repurchased.

Jupiter to hold crucial governance vote on whether to...

TRUMP: WE’RE IN A TRADE WAR WITH CHINA

TRUMP: WE'RE IN A TRADE WAR WITH CHINA

ERIC TRUMP CONFIRMS PLANS TO TOKENIZE REAL ESTATE WITH WORLD LIBERTY FINANCIAL:

ERIC TRUMP CONFIRMS PLANS TO TOKENIZE REAL ESTATE WITH...

PAXOS MINTS $300 TRILLION PYUSD ON ETHEREUM: BLOCKCHAIN

PAXOS MINTS $300 TRILLION PYUSD ON ETHEREUM: BLOCKCHAIN Link

U.S. BANK, THE FIFTH-LARGEST BANK IN THE US, CREATES NEW DIGITAL ASSETS AND MONEY MOVEMENT UNIT – BSW

U.S. BANK, THE FIFTH-LARGEST BANK IN THE US, CREATES...
spot_imgspot_imgspot_img

Related Articles

spot_imgspot_imgspot_imgspot_img

Popular Categories

spot_imgspot_imgspot_img