Coinbase makes another push to appeal its case against the SEC, citing lawmakers' FIT21 vote

Crypto exchange Coinbase made a second push in a motion to appeal a judge's ruling in its case involving the U.S. Securities and Exchange Commission, pointing to developments over the past week in Congress.

In a closing brief asking to file an interlocutory appeal posted on Friday, the exchange noted a division between lawmakers and the SEC in how they view its jurisdiction over crypto. 

"Legislators’ disagreement with the SEC’s position meanwhile has deepened: just this week, the U.S. House of Representatives approved on a bipartisan basis comprehensive digital asset legislation that would deny the SEC the expansive jurisdiction it claims," Coinbase said in its latest brief.

Over the past week, the U.S. House of Representatives voted 279 to 136 to pass the Republican-led Financial Innovation and Technology for the 21st Century Act, also known as FIT21. Seventy-one Democrats voted in support of the bill, including former Speaker of the House Nancy Pelosi (D-Calif.). The bill would grant more power and funding to the Commodity Futures Trading Commission to oversee crypto spot markets and "digital commodities," particularly bitcoin.

Though the bill is unlikely to become law this year, some in crypto viewed the House vote as a shift in political winds in their favor.

Coinbase's appeal

Coinbase first filed a motion to appeal after Judge Katherine Polk Failla of New York disagreed with Coinbase's point that investment contracts need a formal contract. When a customer buys a token on Coinbase, they are not just buying a token, but they are buying into that "token's digital ecosystem," Failla said.

The main question the exchange is looking to appeal is "whether the SEC may regulate as 'investment contracts' digital asset transactions that don’t involve anything contractual," Grewal said in a post on X on Friday.

The SEC has said Coinbase's move to appeal its case should be denied.

Next, Judge Failla will decide whether the appeal request can go on to the U.S. Court of Appeals for the Second Circuit, which also has to agree to hear the appeal.