Coinbase’s legal team recently requested U.S. District Judge Katherine Failla to reconsider a previous ruling that categorized secondary sales of crypto assets as securities transactions. This plea is part of Coinbase’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC), as outlined in a letter dated March 5.

Michael Savitt, representing Coinbase, argued that the SEC’s classification of crypto sales in the secondary market as securities contracts, particularly in the SEC vs Wahi case, lacks a solid legal basis since it was not thoroughly examined in court.

The legal dispute stems from a lawsuit filed by the SEC in July 2022 against Ishan Wahi, a former Coinbase product manager, his brother Nikhil Wahi, and their friend Sameer Ramani. The lawsuit involved insider trading allegations related to nine cryptocurrencies.

Despite efforts to dismiss the charges, the SEC reached a settlement with the Wahi brothers in June 2023, while a default judgment was issued against Ramani. Coinbase’s attorney, Savitt, criticized this judgment, arguing it should not set a precedent due to the lack of substantive legal debate.

Following the SEC’s attempt to use the Wahi case outcome against Coinbase on March 4, the crypto exchange is now seeking to challenge the SEC’s stance by questioning the regulatory body’s oversight of crypto exchanges.

The ongoing debate between Coinbase and the SEC includes discussions on the application of the Howey test, a criteria used to determine if crypto assets traded on the platform are securities.

Despite Bitcoin being classified as a commodity, the regulatory status of other cryptocurrencies remains uncertain, posing challenges for centralized exchanges. With the SEC ramping up regulatory actions under the leadership of Gary Gensler, companies like Ripple, Binance, and Coinbase are facing increased scrutiny.

For more news and updates on cryptocurrency regulation and industry developments, stay tuned to Global Crypto News.

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