Coinbase has appealed to the Second Circuit Court, seeking a ruling that crypto trades on its platform are not considered securities. This legal maneuver is part of Coinbase's defense against a lawsuit filed by the SEC in June 2023, which claims the exchange operated as an unregistered securities exchange. In its filing, Coinbase emphasizes the importance of determining whether secondary market crypto transactions meet the criteria for investment contracts under securities law, arguing that without clarity, the industry faces inconsistent regulation. The exchange contends that transactions on its platform involve the sale of digital assets rather than traditional securities, lacking the obligations or ongoing commitments typically associated with such contracts. Recently, a New York federal judge acknowledged conflicting judicial interpretations regarding what constitutes a security, which enhances Coinbase's argument for a definitive ruling. Furthermore, the case has been positioned by Coinbase as a crucial opportunity to establish clear regulatory guidelines in a rapidly evolving digital asset market.

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