Is the SEC Acting ‘Unlawfully’ in the Digital Assets Space?
The US crypto industry may have just gained a powerful ally in the battle to protect digital assets. The US Chamber of Commerce, the largest business federation in the world, filed a brief in support of Coinbase against its legal case against the SEC. What does this mean for crypto regulation in the US?
What is happening with the US Chamber of Commerce’s brief in the Coinbase vs SEC case?
The brief filed by the US Chamber of Commerce criticizes the SEC’s treatment of digital assets. It opens by stating, “As it stands today, nobody knows for certain which digital assets, if any, are ‘securities’ under federal law.” Later on, it adds, “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.”
Additionally, the US Chamber of Commerce cites three more arguments to support its decision to support Coinbase:
- Regulatory uncertainty is killing innovation in the U.S.
- The SEC is destabilizing the digital assets regulatory environment
- The SEC is violating Constitutional Due Process and Fair Notice rights
This news is a huge boon to Coinbase. The US Chamber of Commerce is the largest, most influential business organization in the country. By standing with Coinbase, the US Chamber of Commerce is sending a clear message that it will fight to protect all business interests in the US against government overreach and not allow the crypto industry to be unfairly targeted.
Why is the SEC bringing charges against Coinbase?
The move comes on the heels of the SEC filing a Wells Notice against Coinbase. A Wells Notice serves as notice that the SEC is planning on bringing an enforcement action against a respondent. In this case, the SEC is coming after Coinbase for selling illegal securities in the form of digital assets to US citizens.
Not surprisingly, this notice frustrated Coinbase leadership. For years, the exchange has sought out clarification from the SEC on how it should conduct its business and service offerings. The SEC has refused to provide any clarity, however, to the point of canceling meetings, not returning communication requests, etc. As a result, the situation has deteriorated to that the point of Coinbase publicly stating it is considering moving its business operations out of the US.
In all likelihood, the legal battle will be a long one. By supporting Coinbase, the US Chamber of Commerce provided some much-needed support for the upcoming war.