In a continued effort to resolve a crucial legal point at the center of its dispute with the Securities and Exchange Commission (SEC), Coinbase, the popular cryptocurrency exchange, filed another response in court seeking to appeal its case to a higher court.

The ongoing legal battle between Coinbase and the SEC revolves around whether the exchange should be permitted to raise a single, core legal question for consideration by a higher court. Coinbase's attempt to have the SEC's enforcement case dismissed was previously denied in federal court. In response, the company's lawyers recently filed for an interlocutory appeal with hopes to have one specific question reviewed at the next level.

At the heart of the matter is the query of whether a digital asset transaction, which imposes no obligations on the original issuer, qualifies as an investment contract regulated by the SEC. Coinbase argues that this legal question is unique and could significantly impact the multi-trillion-dollar industry.

The exchange highlighted that no appellate court has yet addressed the issue of whether a digital asset transaction without post-sale obligations can be considered an "investment contract" under the Howey Test, the legal standard for determining securities. Coinbase also pointed out what it sees as inconsistency in the SEC's actions, citing the regulatory body's pursuit of a similar appeal in its case against Ripple.

Coinbase had previously submitted their request for an appeal to the U.S. Court of Appeals for the Second Circuit. However, the SEC countered on May 10, arguing that the court had already noticed the lack of legal authority in Coinbase's arguments. The SEC believes that Coinbase's latest request for an appeal also fails to establish legal grounds and should not be granted.

For the appeal to proceed, it must be accepted by the courts, including Judge Katherine Polk Failla of the U.S. District Court for the Southern District of New York, who previously rejected Coinbase's request to dismiss the SEC's original case, which accused the exchange of illegal operations.

A resolution to this central legal question could have far-reaching consequences and potentially impact other SEC enforcement actions against the cryptocurrency industry. Both Coinbase and the SEC remain engaged in the legal wrangling while awaiting the court's decision on whether to allow the appeal to proceed.