During the court proceedings led by Judge Failla, a significant point of discussion was applying the Howey test, a long-standing method for determining whether a transaction qualifies as an investment contract and, thus, a security under U.S. law. The debate delved into whether staking rewards and the business model of Coinbase fall under this category.

The case’s trajectory seems to favor Coinbase, especially considering the precedent set by the Ripple case. In that instance, XRP was not classified as a security, which has provided a benchmark for the current proceedings. The outcome of this lawsuit is expected to have substantial implications for the cryptocurrency industry, potentially influencing the interpretation of securities law and the application of the Howey test for years to come.