On May 11, an unexpected ally rose in defense of Coinbase, a renowned cryptocurrency organization. The U.S. Chamber of Commerce, the largest nonprofit business lobbying entity in the country, filed a compelling amicus brief, challenging the Securities and Exchange Commission (SEC) and its case against the crypto giant.
The Chamber’s Bold Stance on Regulatory Clarity
The Chamber of Commerce submitted the brief to underline its members’ vested interest in regulatory lucidity. Many entities, regulated under U.S. securities laws, may be disadvantaged due to the SEC’s current approach toward digital assets.
The brief highlighted the inherent ambiguity in the digital assets sector, stating, “In the current scenario, it is impossible to definitively determine which digital assets fall under the ‘securities’ category as per federal law. This uncertainty is not trivial.”
SEC’s Actions: Unlawful and Economically Detrimental
The Chamber didn’t hold back in criticizing the SEC, stating that the regulatory body’s actions damaged the economy and violated the law. The brief asserted that the lack of decisiveness and delay in providing regulatory clarity could lead to severe repercussions.
The SEC’s actions conflict with existing Constitutional Due Process clauses and Fair Notice rights. The regulatory body’s reticence in defining clear rules ahead of time and its tendency to impose liability ex-post through enforcement actions contradicts basic principles of administrative law and the Due Process Clause.
The Industry’s Perspective: A Plea for Regulatory Transparency
On May 12, a prominent crypto legal expert, known on social media as ‘@MetaLawMan,’ underlined the significance of this development.
According to him, the court would have to consider the arguments the Chamber of Commerce presented thoughtfully. He further emphasized the importance of the development by stating, “The largest, most influential business organization in the U.S. has just declared it stands with crypto.”
Coinbase had filed a complaint against the SEC in April, seeking regulatory clarity for the industry. However, the cry for transparency has largely been met with silence. The SEC, under its self-proclaimed “cop on the beat” chairman, continues to target U.S. crypto companies aggressively.
Burned Bridges Can Still Be Mended
In a plea for dialogue in late April, Coinbase urged the SEC to engage in a constructive conversation. However, CEO Brian Armstrong expressed concern over the SEC’s aggressive stance, stating, “A Wells Notice at this stage, in the absence of a clear rule book, is not constructive, and it’s not good for America.”
Armstrong further underscored Coinbase’s readiness to defend its position in court, though he hoped it wouldn’t come to that.
This ongoing standoff underscores the need for a clear and transparent regulatory framework for digital assets that protect investors and businesses.
It remains to be seen how the U.S. Chamber of Commerce’s bold stance will influence the SEC’s approach to digital assets.
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