Coinbase, SEC spar over investment definition in appeal attempt

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Coinbase challenges the SEC’s use of the Howey test as its appeal against allegations that its staking program is an unregistered securities offering.

The SEC is evading the real issue, and the court was wrong to take its side, Coinbase claims in a defense of its interlocutory appeal.

Coinbase has leaned heavily into case law in its latest volley against the United States Securities and Exchange Commission and has come to a rare conclusion: “The SEC seeks to side-step the test.”— an appeal against a single ruling in an ongoing case — on May 24. The document is a response to the SEC’sCoinbase claimed that the controlling question in the SEC suit is whether an investment contract requires a contractual undertaking.

“The SEC ignores that no appellate court in the 78 years since Howey has found an investment contract absent a post-sale contractual undertaking.” That, in turn, makes the issue ripe for a court decision and not “the inevitable application of settled law,” Coinbase said. It also found the SEC’s claims in its suit against Ripple to be inconsistent with those in Coinbase’s case and noted that the House of Representatives just days earlier passed a bill “that would deny the SEC the expansive jurisdiction it claims.”in June 2023 alleging violations of securities law.

Coinbase has been quite proactive in its self-defense and the defense of the crypto industry. In June, days after the SEC suit was filed, itZeneca’s portfolio peaked at $20M — and he has ‘2021 vibes’ again: NFT Collector

 

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