Coinbase has petitioned a U.S. appeals court to clarify whether crypto trading on its platform falls under securities laws. In a filing, Coinbase argued that this case presents an opportunity to resolve the legal uncertainty around secondary trading of digital assets. Lawyers stated that such trading does not fulfill the Howey test criteria necessary for an investment contract, primarily because traders operate anonymously in a blind bid-ask system, negating the existence of a common enterprise. This appeal follows a district court's decision denying Coinbase's request for case dismissal in a lawsuit from the SEC, which claims Coinbase is acting as an unregistered securities exchange. The SEC’s stance has seen recent shifts, with its new leadership aiming for clarity instead of the previous enforcement-focused approach. Currently, the SEC's case against Coinbase is on hold as the exchange seeks clarification from the higher court, which the district judge indicated was necessary due to conflicting legal precedents.

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