The United States Chamber of Commerce has blasted the Securities and Exchange Commission (SEC) for its “haphazard, enforcement-based approach” to regulating the cryptocurrency industry on American soil.
In an amicus brief filed to the U.S. Court of Appeals on May 9, the U.S. Chamber of Commerce threw its full weight behind Coinbase, accusing the SEC of deliberately creating a precarious and uncertain landscape for crypto companies operating in the country.
“The SEC has deliberately muddied the waters by claiming sweeping authority over digital assets while deploying a haphazard, enforcement-based approach,” it wrote.
“This regulatory chaos is by design, not happenstance.”
An “amicus brief” derives its namesake from the Latin term, “friend of the court” and refers to advice or information provided by third parties that aren’t explicitly involved in a specific court case.
Additionally, the Chamber of Commerce pressured the SEC to promptly respond to Coinbases’ April 25 complaint, which seeks to compel the regulator to reply to its “petition for rulemaking” and provide clearer regulatory guidelines for crypto firms operating in the country.
The Amicus Curiae brief submitted by the Chamber of Commerce. Source: Chamber of Commerce.
The complaint was filed after the crypto exchange received a Wells notice from the SEC in March concerning the exchange’s “potential violation” of U.S. securities law.
It’s worth noting that Coinbase’s complaint isn’t asking the court to force the SEC to adopt new rules for cryptocurrencies. Instead, the exchange is merely requesting that the commission provide a response to its July petition, which it is legally entitled to receive within a “reasonable amount of time.”
Directly addressing this point, the Chamber of Commerce claimed that SEC’s “refusal” to respond to Coinbase or “otherwise engage in any rulemaking” isn’t just harmful, they are in fact, unlawful.
“The SEC’s actions are not just harmful policy; they are unlawful; and the consequences of the SEC’s continued delay are severe for that reason too.”
The Chamber of Commerce also called out the financial regulator for failing to provide a clear answer to the question of which, if any, of the roughly 20,000 digital assets currently in existence should be deemed “securities” under Federal Law.
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It highlighted that the answer to this question would have “immense implications” for “every person involved” in the emerging, $1 trillion digital-asset economy.
“Remarkably, the Securities and Exchange Commission – despite proclaiming itself the primary regulator of digital assets – has refused to resolve this threshold question.”
The Chamber of Commerce isn’t alone in providing legal support for Coinbase. Paradigm, the crypto investment firm led by Coinbase co-founder Fred Ehrsam petitioned to file another amicus brief in support of the crypto exchange, similarly claiming that the SEC’s actions have “crippled a nascent industry.”
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