Several advocacy groups have submitted amicus briefs to support Coinbase’s appeal, urging the United States Securities and Exchange Commission (SEC) to establish clear regulations for the cryptocurrency industry.
In separate filings made on March 18 to 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 all argued that the SEC lacks clear guidelines for market participants to navigate effectively in the United States. They emphasized that without clear rules in place, companies would be more inclined to relocate outside of the country.
A joint filing from the Satoshi Action Fund and Texas Blockchain Council stated, “The uncertainty and inaction caused by the SEC could lead to digital asset companies completely leaving the United States. The need for clear rules, accompanied by sufficient notice grounded in congressional authority, is particularly crucial when the SEC intends to impose ‘adverse consequences’ and ‘liability’ on the digital asset industry for past actions taken in good faith reliance on the SEC’s statements.”
The amicus briefs were in support of Coinbase’s appeal, which was part of a petition filed by the crypto exchange in July 2022, requesting the SEC to establish regulations regarding tokens considered securities. The commission denied the petition in December 2023, approximately six months after initiating an enforcement action against Coinbase for alleged violations of securities laws. Coinbase then appealed the decision, leading to the recent submission of amicus briefs.
The CCI’s brief criticized the SEC’s recent denial of Coinbase’s petition, stating, “The Commission’s denial of Coinbase’s petition for rulemaking to define digital asset securities and regulate digital securities markets is just one among many Commission decisions that disregard fundamental principles of fairness, erode trust in domestic markets, and continue to harm consumers and innovators.”
The U.S. Chamber of Commerce also supported Coinbase’s appeal, expressing concerns about the SEC’s conduct in other cases. The timing of the appellate court’s decision on the Coinbase case remains uncertain. The SEC has already taken enforcement actions against various 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 further concerns about the commission’s behavior in other legal matters.
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