SEC vs. Coinbase: The Agency Is Criticized As A Bully
- While Coinbase attempts to get the SEC to respond to digital asset legislation, crypto groups step in.
- The Chamber of Commerce has criticized the SEC’s attitude toward crypto exchanges.
The US Securities and Exchange Commission (SEC) seems to be facing strong opposition from the parties because of the agency’s imposition in the Coinbase legal battle.
Many crypto organizations have joined the U.S.-based exchange in a series of “amicus” filings filed this week, claiming that the SEC is purposely ruining the new sector by insisting that there is nothing unusual or exceptional about crypto that deserves alternative treatment under securities rules.
On Thursday, the United States Court of Appeals for the Third Circuit allowed the numerous organizations’ motion to join the lawsuit.
“It is no surprise that the SEC’s actions have crippled a nascent industry and sown confusion among countless firms unable to conform to the SEC’s view of the law or challenge that view in court,” said a brief from Paradigm.
The papers add to Coinbase’s request, made more than two weeks ago, to compel the SEC to reply to an earlier 2022 petition requesting that the agency issue guidelines defining cryptocurrency’s status in securities regulation. Although SEC Chair Gary Gensler has said that the agency has no intention of crafting unique regulations for cryptocurrency, the regulator is required to reply in the legal battle by May 13.
The US Chamber of Commerce also backed Coinbase in an amicus brief submitted to the US Court of Appeals on May 9, accusing the SEC of intentionally creating a risky and unpredictable atmosphere for crypto firms operating in the nation.
Coinbase now has the backing of one of the world’s top commercial groups. According to its website, the US Chamber of Commerce serves the interests of more than 3 million companies and organizations throughout the nation, ranging from local firms to worldwide corporations.
Notwithstanding the scale of the cryptocurrency markets and their prospective price, the SEC has failed to provide guidance to corporations. Instead, it continues to issue enforcement actions as well as ambiguous and conflicting public comments.
According to the Chamber, the SEC’s failure to participate in rulemaking or adopt a systematic approach jeopardizes due process, administrative law, and good governance.
The Crypto Council for Innovation, an industry advocacy group, also claims that the SEC’s harsh posture against companies wanting to comply hampers investors’ ability to distinguish between good and bad firms since the SEC paints them all with the same brush.
The crypto community believes that the Chamber’s engagement demonstrates the importance of the Coinbase vs. SEC lawsuit. The conclusion might have far-reaching repercussions for the digital asset industry and the US regulatory system.
The CEO of Ripple, a payment blockchain-based startup, Brad Garlinghouse, has repeatedly indicated that the lack of legislative certainty on crypto in the United States drives money overseas and stifles innovation.
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