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According to recent reports, Coinbase has taken action in the ongoing Ripple case, urging Judge Katherine Polk Failla to reconsider the SEC’s latest appeal as further evidence of the need for judicial clarity. Coinbase argues that the uncertainty surrounding the application of the Howey Test to secondary market sales requires intervention from a higher court.
Coinbase Pushes for Clarity on the Howey Test
In its letter to the court, Coinbase highlighted how the SEC’s appeal in the Ripple case underscores the confusion around the Howey Test, a legal standard from a 1946 Supreme Court decision used to determine what qualifies as a security. With conflicting opinions from Congress, Senators, and regulatory agencies, Coinbase’s attorneys stressed the importance of resolving this issue.
The letter emphasized, “The division among Members of Congress, Senators, and regulatory agencies in answering this question demonstrates its complexity, and differing judicial outcomes further underscore the point.”
Ripple’s Appeal Strengthens Coinbase’s Argument
Coinbase had first filed a temporary appeal request in April, asking the Second Circuit Court of Appeals to address the critical question of how the Howey Test applies to digital assets. While such appeals before a final ruling in a case are rarely granted, legal expert MetaLawMan noted that the SEC’s appeal in the Ripple case has strengthened Coinbase’s argument for reconsideration.
Although the SEC responded in May by urging Judge Failla to reject Coinbase’s objection, claiming there was no “substantial ground for difference of opinion,” the judge has yet to issue a ruling. Now, as the SEC’s appeal in the Ripple case proceeds, Coinbase is once again pushing for its case to be reviewed. Coinbase argues that having both cases presented to the Second Circuit Court simultaneously could offer a broader perspective on the SEC’s stance on digital asset regulation.
What’s Next for the Ripple Case?
With both Ripple and Coinbase applying pressure on the court, the legal landscape for digital assets may soon undergo significant changes. The outcome of these cases could have far-reaching implications for how digital assets like Ripple and other cryptocurrencies are regulated in the future.
