News View Non-AMP

Coinbase Challenges SEC on Crypto Staking: Unregistered Security or Not?

Published by
Mustafa Mulla

Coinbase, a major exchange platform, is gearing up for a legal showdown with the Securities and Exchange Commission (SEC). Their latest move? Filing a robust response to the SEC’s comments on their interlocutory appeal request.

But what’s at stake? Let’s dive in.

The Background: Coinbase vs. SEC

On May 24, Coinbase filed a memorandum supporting its appeal against a specific ruling in an ongoing case with the SEC. This document responds to the SEC’s opposition to Coinbase’s initial appeal request. 

Coinbase initially filed the appeal on April 12, contesting a March 27 ruling that the SEC had sufficient grounds to claim that Coinbase’s staking program was an unregistered securities offering.

Coinbase’s Argument

Coinbase’s stance is clear: they argue that digital asset transactions lacking post-sale obligations to the original issuer should not be categorized as investment contracts, as per SEC regulations. It’s essentially a debate over interpretation, with Coinbase standing firm in their belief that the absence of such obligations nullifies the classification as an investment contract.

On the opposing side, the SEC refuses to yield. They vehemently reject Coinbase’s claims, asserting that no court precedent mandates a post-sale contractual obligation for applying the Howey test—a litmus test used to determine whether something qualifies as a security.

Furthermore, the SEC dismisses Coinbase’s latest appeal request, citing a lack of legal merit. They argue that previous court rulings have already dealt decisive blows to Coinbase’s arguments, leaving no room for doubt that the appeal should be quashed.

Implications Beyond Coinbase

The ramifications of this legal battle extend far beyond Coinbase’s fate. The ultimate decision, to be made by the courts under the leadership of Judge Katherine Polk Failla, could significantly shape the landscape of digital asset regulation.

While Judge Failla had previously rejected Coinbase’s attempt to dismiss the SEC’s case, the final resolution of this showdown could establish a precedent that resonates throughout the cryptocurrency industry, influencing how digital assets are regulated and traded.

Is Coinbase right in challenging the SEC? Weigh in with your take on the staking program controversy!

Also Read : From Ripple To Ethereum: Understanding What The SEC Is Trying To Do With The Regulations

Mustafa Mulla

Mustafa has been writing about Blockchain and crypto since many years. He has previous trading experience and has been working in the Fintech industry since 2017.

Recent Posts

Top AI & Big Data Projects to Consider in Q3 2025: LINK, ICP, NEAR, LPT & INJ

Artificial Intelligence (AI) and Big Data are transforming cryptocurrency by providing tools for analysis, prediction,…

June 5, 2025

Is Ozak AI the Next Altcoin Superstar After Bitcoin and Ethereum?

Cryptocurrency market evolves, investors constantly seek the next breakout project—one that offers real-world utility, disruptive…

June 5, 2025

Why Pi Network Binance Listing Didn’t Happen After Community Vote?

Despite Pi Network securing 86.8% support in Binance’s February 2025 vote to list, Pi Coin…

June 5, 2025

3 Top Cryptos For Generational Wealth in 2025

Crafting generational wealth in 2025 demands sharp focu on the best cryptos to buy now.…

June 5, 2025

Solana’s $500M Reserve Sparks Altcoin Frenzy: Why Kaanch Could Be the Next 100x Gem

The announcement of a $500 million convertible note deal by Classover Holdings to establish a…

June 5, 2025

Donald Trump’s Truth Social files S-1 for a Bitcoin ETF

Trump Media and Technology Group Corp. (DJT) has filed an S-1 registration with the SEC…

June 5, 2025