Coinbase Inc. got an unusual chance to stay ahead in a U.S. federal court battle with the Securities and Exchange Commission (SEC) when a judge granted the company’s request to file a narrow appeal against the regulator’s allegations regarding the to pursue trading in crypto securities.

If the U.S. digital asset exchange can get the U.S. Court of Appeals for the Second Circuit to accept its appeal and agree that the SEC was wrong in its allegations that Coinbase improperly handled trading in unregistered securities, a Such a decision will resonate throughout the crypto industry.

Judge Katherine Polk Failla of the U.S. District Court for the Southern District of New York ruled on Tuesday to grant a request by Coinbase to ask the higher court to consider a key issue in the dispute, in a proceeding called a preliminary appeal. And while Coinbase investigates this matter, the rest of the case will lie dormant.

Failla noted that she does not appreciate the company’s “efforts to discredit the SEC’s approach to crypto assets,” but noted the conflict between rulings from various federal courts on similar issues, ruling that “conflicting decisions “on an important legal question” require the guidance of the Second Circuit.”

At the heart of the legal conflict between the U.S. Securities and Exchange Commission and the leading U.S. crypto exchange is the question of whether certain tokens traded on the platform should be considered securities and thus be considered a violation of the law.

Coinbase has argued, among other things, that issuers of crypto tokens traded on its secondary market owe buyers nothing, so the tokens do not meet legal standards for what constitutes a security. called Howey test.

The judge said she was granting the April 2024 motion “because it is a crucial question of law regarding the reach and application of Howey to crypto assets, on which there is significant cause for disagreement and the resolution of which would advance the ultimate outcome.” “Ending the SEC’s Enforcement Action.

“We appreciate the court’s careful consideration,” Paul Grewal, Coinbase’s chief legal officer, wrote on the social media site X. “To the Second Circuit we go.”

Read more: Coinbase is fighting an uphill battle with the US Securities and Exchange Commission to get answers to key crypto questions

A spokesman for the SEC — which will still be led by crypto skeptic Gary Gensler until he steps down as chairman after President-elect Donald Trump is sworn in on Jan. 20 — declined to comment on the latest decision.

Ultimately, this and other court battles over what a crypto security is could end up in the Supreme Court, but ultimately become irrelevant if Congress passes a new law determining how the assets and their trading should be regulated in the United States . That’s what the industry is aiming for with its political operations and lobbying efforts, focusing on steering this year’s new Congress toward more industry-friendly legislation.

The SEC leadership is also on the verge of handing control to Republicans, which will likely mean greater openness toward the crypto industry. A new leader of the agency could change the course of its enforcement actions, including this lawsuit.