Several advocacy groups have filed amicus briefs in support of an appeal by Coinbase, calling for the United States Securities and Exchange Commission (SEC) to create clear rules for the crypto industry.
In separate March 18 filings with the Third Circuit Court of Appeals, the Crypto Council for Innovation (CCI), Satoshi Action Fund, Texas Blockchain Council, investment firm Paradigm, digital asset company Lejilex and the U.S. Chamber of Commerce said the SEC lacked clear guidelines for market participants to successfully follow in the United States. Many of the filings argued that without clear rules of the road, companies would be more inclined to leave the country.
“The uncertainty and paralysis created by the SEC could cause digital asset companies to move out of the United States altogether,” said a joint filing from the Satoshi Action Fund and Texas Blockchain Council. “The need for clear rules, with adequate notice rooted in congressional authority, is especially crucial where the SEC seeks to impose ‘adverse consequences’ and ‘liability’ on the digital asset industry ‘for past actions which were taken in good-faith reliance on [the SEC’s] pronouncements.’”
The amicus briefs supported a Coinbase appeal, part of a petition filed by the crypto exchange in July 2022 for the SEC to establish rules on tokens it considered securities under its purview. The commission denied the petition in December 2023, roughly six months after it filed an enforcement action against Coinbase for allegedly violating securities laws. Coinbase appealed the decision, prompting the recent round of amicus briefs.
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“The Commission’s recent denial of Coinbase’s petition for rulemaking to define digital asset securities and govern the regulation of digital securities markets is the latest in the long line of Commission decisions that flouts basic principles of fairness, diminishes faith in domestic markets, and will continue to harm consumers and innovators alike,” said the CCI’s brief.
The U.S. Chamber of Commerce added:
“The SEC’s failure to provide clarity for this important new industry offers a case study in the dangers of refusing to adapt regulation to new circumstances.”
It’s unclear when the appellate court could decide on the Coinbase case. The commission has already filed enforcement actions against crypto firms, including Binance, Coinbase, 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 from many about the commission’s conduct in other cases.
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