Coinbase counterattacks SEC with new appeal, citing House passage of FIT21

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Coinbase's Legal Battle with the SEC Continues

The U.S. cryptocurrency exchange Coinbase has once again challenged the U.S. Securities and Exchange Commission (SEC) by filing a new motion for appeal in its ongoing legal dispute. This move comes after significant developments in Congress, which Coinbase believes indicate a deepening divide between legislators and the SEC on the regulation of digital assets.

FIT21 Bill Seeks to Reverse SEC Jurisdiction

In its closing statement filed on Friday, Coinbase highlighted recent legislative actions that signal a shift in how digital assets are regulated. The company pointed to the bipartisan passage of the "21st Century Financial Innovation and Technology Act" (FIT21) in the U.S. House of Representatives, which proposes to limit the SEC's jurisdiction over cryptocurrencies.

Coinbase stated, "The divide between legislators and the SEC has deepened: just this week, the U.S. House of Representatives on a bipartisan basis passed comprehensive digital asset legislation that would strip the SEC of the broad regulatory authority it claims."

The cryptocurrency market bill FIT21 successfully cleared the House of Representatives, with support and opposition voices rising. What is the next step? Key to escaping SEC regulation! What are the conditions for defining "decentralized network" in the FIT21 bill? The public chain killer is coming.

Shift in Political Winds: Both Parties Inclined to Loosen Restrictions

The FIT21 bill passed the House of Representatives with 279 votes to 136, aiming to grant the Commodity Futures Trading Commission (CFTC) more power and funding to regulate the spot market for cryptocurrencies like Bitcoin. The bill garnered support from 71 Democrats, including former House Speaker Pelosi, indicating a significant bipartisan consensus.

Although the chances of the bill becoming law this year are slim, the House vote is seen by some in the cryptocurrency community as a favorable shift in the political winds for digital assets.

Coinbase's Legal Arguments

Coinbase's appeal focuses on the ruling by New York judge Katherine Polk Failla, who disagreed with Coinbase's view that investment contracts require formal agreements. According to Failla, when customers purchase tokens on Coinbase, they are effectively buying into the token's digital ecosystem, not just the token itself.

Coinbase's Chief Legal Officer Paul Grewal explained in a tweet on Friday, "The key issue Coinbase is trying to address is 'whether the SEC can regulate digital asset transactions that do not involve any contracts as 'investment contracts.'"

SEC: Opposes Coinbase's Appeal

The SEC opposes Coinbase's motion for appeal, arguing that the request should be denied. The decision will now be up to the judge.

Impact of the SEC Dispute on the Industry's Direction

As Coinbase continues its legal battle with the SEC, the latest developments in congressional bills may play a crucial role in the future of cryptocurrency regulation in the United States. The outcome of this appeal could have significant implications for the broader crypto industry and its regulatory environment.