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

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.”

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