Advocacy Groups Urge SEC to Establish Clear Cryptocurrency Regulations: Spotlight on Coinbase Appeal
Summary:
Several advocacy groups have filed amicus briefs supporting an appeal by Coinbase, urging the U.S. Securities and Exchange Commission (SEC) to establish clear industry rules for cryptocurrencies. Among the filers were the Crypto Council for Innovation, the Satoshi Action Fund, and the U.S. Chamber of Commerce, who criticized the SEC's lack of precise guidelines for market participants. These filings argue that the lack of clear regulations could prompt digital currency firms to exit the U.S. The briefs were in support of Coinbase's appeal for the SEC to set rules on tokens considered as securities. The SEC's decision on the appeal is still pending.
Several advocacy organizations have submitted friend of the court briefs in support of Coinbase's appeal, urging the U.S. Securities and Exchange Commission (SEC) to establish precise regulations for the cryptocurrency sector. In individual filings on March 18 to the Third Circuit Court of Appeals, entities such as 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 criticized the SEC for its lack of explicit guidelines for participating actors within the U.S. market. The majority of these documents contend that without specific, delineated regulations, businesses might be more likely to relocate from the country.
As per a corresponding filing from the Satoshi Action Fund and Texas Blockchain Council, the ambivalence and standstill propagated by the SEC could push digital asset businesses from the U.S. completely. The necessity for unambiguous regulations, offering sufficient warning and anchored in congressional authority, is particularly vital in situations in which the SEC endeavors to enforce 'negative consequences' and 'liability' on the digital asset industry for prior actions executed in genuine belief in response to SEC's rulings.
These briefs were presented in support of Coinbase's appeal, a factor of a petition filed by the cryptocurrency exchange in July 2022 urging the SEC to delineate rules on tokens perceived as securities under their jurisdiction. The commission declined the petition in December 2023, approximately half a year post filing an enforcement action against Coinbase for supposed infractions of securities laws. Coinbase contested the judgement, leading to the most recent set of friend of the court briefs.
The CCI, in their brief, remarked on the SEC's recent denial of Coinbase's petition for rule-making to identify digital asset securities and manage their regulatory oversight, claiming this to be the latest instance in a series of SEC decisions that disregard fundamental principles of fairness, undermine public confidence in domestic markets, and continue to negatively affect both consumers and innovators.
Adding to this, the U.S. Chamber of Commerce stated that the SEC's lack of clarity for this significant new sector underlines the risk inherent in refusing to adjust regulations to accommodate new contexts.
The time frame for the appellate court's decision on the Coinbase issue remains undetermined. The commission has already initiated enforcement actions against firms such as Binance, Coinbase, Kraken and Ripple in the crypto domain. On March 18, a U.S. district court imposed sanctions on the SEC for their 'bad faith' conduct in the lawsuit against Debt Box, which raised alarm among many about the SEC's behavior in various other cases.
Published At
3/20/2024 12:31:12 AM
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