Coinbase has asked a US appeals court to rule on whether the crypto trading activity on its platform should be subject to securities laws.

In a court filing Tuesday, lawyers for Coinbase urged the Second Court of Appeals to hear its case, arguing that it “provides the best opportunity to decide the fundamental legal question of how to treat secondary trading in digital assets.”

“This case calls for the court’s immediate attention,” lawyers for Coinbase wrote in their petition. “Whether secondary market digital asset trading falls under the federal securities laws is an issue of enormous importance to the crypto industry, consumers, financial institutions and lower courts in need of guidance. This case presents an ideal vehicle to address this issue and provide clear rules for this multi-billion-dollar industry.”

Coinbase argued that crypto trading on its platform shouldn’t actually trigger federal securities laws because secondary crypto transactions don’t meet all the prongs of the Howey test, the long-standing legal framework used to determine what qualifies as an “investment contract.” Because buyers and sellers on Coinbase’s platform are matched in a blind bid-ask system and are therefore anonymous to each other, there can be no joint business between them, the filing said.

The exchange’s petition comes two weeks after the Southern District of New York (SDNY) issued a rare stay in the US Securities and Exchange Commission’s (SEC) case against Coinbase, giving Coinbase time to appeal to a higher court for clarity.

The SEC sued Coinbase in June 2023 for allegedly operating as an unregistered securities exchange, broker and clearing agency. When Coinbase tried to have the case dismissed, the district judge overseeing the case rejected its motion, finding that the SEC had made a “plausible” argument that the exchange violated federal securities laws. On Jan. 7, the judge referred the issue to a higher court, writing “conflicting decisions on important legal issues necessitate the Second Circuit’s guidance.”

The SEC’s case against Coinbase will be put on hold while the exchange seeks answers from the Second Circuit.

On the same day Coinbase’s petition was filed, the SEC — now under the leadership of Republican Acting Chairman Mark Uyeda — announced the formation of a crypto task force headed by crypto-friendly Commissioner Hester Peirce. The move signals a shift away from the agency’s “regulation by enforcement” approach to crypto under former chairman Gary Gensler.

“To date, the SEC has primarily relied on enforcement actions to regulate crypto retroactively and reactively, often adopting untested legal interpretations along the way,” the SEC said in a statement. “Clarity about who must register and practical solutions for those seeking to register have been elusive. The result has been confusion about what is legal, creating an environment hostile to innovation and conducive to fraud. The SEC can do better.”