Judge Grants Coinbase Appeal in SEC Crypto Lawsuit

The decision pauses the SEC's case to allow a higher court to address conflicting rulings on whether crypto tokens are securities.

U.S. District Judge Katherine Failla approved Coinbase's request for an interlocutory appeal, pausing the SEC's lawsuit against the crypto exchange.
The appeal will focus on whether certain crypto tokens qualify as securities under the Howey Test, a key legal standard for investment contracts.
Judge Failla cited conflicting rulings in other federal courts and described the issue as a novel legal question requiring higher court guidance.
If the Second Circuit Court of Appeals rules in Coinbase's favor, the decision could lead to the dismissal of significant portions of the SEC's case.
The ruling comes as the SEC prepares for leadership changes, with incoming Chair Paul Atkins expected to take a more crypto-friendly stance under President-elect Donald Trump.