Coinbase Asks Court To Rule Crypto Trades Aren’t Securities

Coinbase Urges Appeals Court To Rule That Crypto Transactions Aren’t Investment Contracts

Disclosure

Updated: 23 January 2025

Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

Join Our Telegram channel to stay up to date on breaking news coverage

Coinbase asked a US appeals court to rule on whether crypto transactions are investment contracts, arguing that the issue is of ”immense importance to the crypto industry.”

The case comes hard on the heels of the departure from the Securities and Exchange Commission of former Chair Gary Gensler, who had waged war against the crypto industry, bringing multiple cases that crypto transactions are investment contracts.

“This case presents an ideal vehicle to address that question and provide clear rules for this multi-trillion-dollar industry,” said lawyers for Coinbase, the biggest crypto exchange in the US. ”Without it, market participants face different rules before different courts, and neither the Commission nor Congress can be certain who is responsible for the regulation of digital-asset trading.”

Now that Donald Trump has retaken the White House and Gensler is to be replaced by the pro-crypto Paul Atkins, it’s also considered likely that the SEC will be more inclined to reconsider its position.

COINBASE IS TAKING ON SEC OVER SECURITIES' RULING

Coinbase is taking the SEC showdown to the next level, asking a U.S. appeals court to declare crypto trades aren’t securities.

They’re pushing to lock in clarity for the future of the digital asset game.

Their argument?… pic.twitter.com/mYDnSZz5Fj

— Mario Nawfal’s Roundtable (@RoundtableSpace) January 23, 2025

SEC Sues Coinbase Over Unregistered Securities Exchange Allegations

In June 2023, the SEC claimed crypto exchange Coinbase operated as an unregistered securities exchange platform. The SEC also accused Coinbase of not registering as a broker, national securities exchange, or clearing agency, evading the disclosure scheme for securities markets.

In its latest petition, Coinbase argues that trades on its platform are not “securities transactions” but rather sales of digital assets, not physical ones.

“The sellers and buyers are anonymous to each other, make no exchange or promise other than the sale of the digital asset itself, and thus have no obligation or continuing commitment to each other past the point of sale,” Coinbase said.

Coinbase added that the buyers do not obtain any rights against the asset’s issuer, such as the case with securities like stocks or bonds.

The latest petitions follows the New York federal judge Katherine Failla’s decision from January 7, when she gave permission for Coinbase to appeal a decision.

Coinbase Asks The Second Circuit To Accept The Review

Coinbase asked the Second Circuit to accept the review of this case, saying that the issue “has divided several district courts.” They stated that there’s no united opinion about digital asset transactions in the secondary market status, with many don’t consider it investment contracts.

Coinbase argues that its appeal “presents the single best opportunity to decide the fundamental legal question of how to treat the secondary trading of digital assets.”

Newest Meme Coin ICO - Wall Street Pepe

Rating