Exclusive: Coinbase CLO Says SEC’s Take On Investment Contract Clashes With 2nd Circuit, Supreme Court
Coinbase’s Chief Legal Officer (CLO), Paul Grewal, spotlighted discrepancy in the way the U.S. Securities Exchange and Commission (SEC) interprets “investment contracts.” Grewal explained that the SEC’s interpretation of investment contracts doesn’t align with court rulings. In addition, he reaffirmed confidence in victory against the SEC.
Coinbase CLO Explains Why The CEX Filed An Interlocutory Appeal
In an exclusive statement to Coingape Media, the Coinbase CLO stated, “The SEC is asking the court to interpret ‘investment contract’ in a way that is inconsistent with every single Second Circuit and Supreme Court case on the issue.” Moreover, Grewal emphasized the need for their interlocutory appeal. He stated, “That is why, even though it’s rarely granted, we are seeking an interlocutory appeal.”
He further emphasized their commitment toward the crypto community. The Coinbase CLO noted, “We can’t leave any stone unturned because we are standing up for the entire industry and the 52 million Americans that own crypto.” In addition, despite the uncertainty over the early appeal, Grewal remained confident toward a favorable outcome in the case.
The Coinbase CLO affirmed, “But even if we don’t have an early appeal, we remain confident in the path forward in the district court.” Moreover, the pro-XRP lawyer, John Deaton, has joined the fray with an appeal to appear as an amici counsel for 4,701 Coinbase customers.
Additionally, in an interview with Fox Journalist Eleanor Terrett, Deaton stated that there’s a 50-50 chance of Coinbase’s interlocutory appeal being approved. Meanwhile, he also acknowledged that uncertainty looms over Judge Failla’s decision on the matter. However, despite the potential challenges, Deaton said, “I think there’s a good chance she grants it.”
Also Read: Coinbase Vs SEC: Pro-XRP John Deaton To Appear As Amici Counsel
Arguments In The Latest Appeal
On April 13, Coinbase petitioned the court for an interlocutory appeal. The appeal underscored a pivotal question in its case against the SEC: whether an “investment contract” necessitates a contractual element. Moreover, Coinbase asserted that this matter extends beyond its individual case.
The Coinbase exchange emphasized that the regulatory ambiguity is impacting the entire digital asset industry and stifling innovation. In addition, the Coinbase CLO emphasized the urgency. In a post on X, he stated, “The SEC’s action against us and other digital asset companies goes way beyond the legal authority granted by Congress and puts an unjust cloud over US digital asset innovation.”
Citing the SEC’s own stance in the Ripple case, Coinbase highlighted similarities in legal arguments and underscored the industry-wide significance of the issue. Despite the legal battle, Coinbase reaffirmed its commitment to the digital asset community, pledging to advocate for clarity while continuing business operations. Hence, the court is deliberating on Coinbase’s request amid ongoing regulatory scrutiny.
Also Read: Coinbase CEO Reacts As Board Member Kathryn Haun Resigns
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