A number of advocacy groups have submitted amicus briefs in support of Coinbase’s appeal, urging the United States Securities and Exchange Commission (SEC) to establish clear regulations for the cryptocurrency industry.
In separate filings on March 18 with the Third Circuit Court of Appeals, the Crypto Council for Innovation (CCI), Satoshi Action Fund, Texas Blockchain Council, Paradigm investment firm, Lejilex digital asset company, and the U.S. Chamber of Commerce argued that the SEC lacked clear guidelines for market participants to adhere to in the United States. They emphasized that without clear rules, companies would be more inclined to relocate outside the country.
A joint filing from the Satoshi Action Fund and Texas Blockchain Council stated, “The uncertainty and paralysis caused by the SEC could lead digital asset companies to completely leave the United States. The need for clear rules, with sufficient notice based on congressional authority, is especially crucial when the SEC seeks to impose ‘adverse consequences’ and ‘liability’ on the digital asset industry for past actions taken in good faith reliance on the SEC’s pronouncements.”
The amicus briefs were in support of Coinbase’s appeal, which was part of a petition filed by the cryptocurrency exchange in July 2022, calling on the SEC to establish rules regarding tokens that it considered securities. In December 2023, the commission rejected the petition, approximately six months after initiating an enforcement action against Coinbase for alleged violations of securities laws. Coinbase appealed the decision, leading to the recent round of amicus briefs.
The CCI’s brief criticized the commission’s denial of Coinbase’s petition, stating, “The Commission’s recent denial of Coinbase’s petition for rulemaking to define digital asset securities and regulate digital securities markets is just one of many decisions that disregard basic principles of fairness, erode trust in domestic markets, and will continue to harm consumers and innovators.”
The U.S. Chamber of Commerce also expressed its support, stating, “The Commission’s actions have consistently undermined the principles of fairness, and they will have negative consequences for both consumers and innovators.”
The timeline for the appellate court’s decision on the Coinbase case remains unclear. The SEC has already taken enforcement actions against other cryptocurrency firms, including Binance, Kraken, and Ripple. On March 18, a U.S. district court imposed sanctions on the SEC for acting in “bad faith” in a lawsuit against Debt Box, raising concerns about the commission’s conduct in other cases.
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