In the ongoing regulatory feud between the United States Securities and Exchange Commission (SEC) and Coinbase, the US Chamber of Commerce has sided with the exchange. The Chamber has filed an amicus brief criticizing the regulator for their action against Coinbase.
On Thursday, the United States Chamber of Commerce filed a brief against the regulator stating that many of its members have a strong interest in regulatory clarity. It added that many of the members are also companies subject to U.S. securities laws.
The U.S. Chamber of Commerce represents approximately 300,000 direct members and claims to represent 3 million businesses and organizations but this claim is often contested. It is the largest nonprofit business lobbying group in the United States, founded in 1912.
Further, the Chamber suggested that many of its members “might be adversely affected by the Securities and Exchange Commission’s current approach to digital assets.” The introduction gets straight to the point:
As it stands today, nobody knows for certain which digital assets, if any, are “securities” under federal law. That is no small question.”
Additionally, the Chamber went on to label that the SEC’s actions were not just harmful to the economy but unlawful. It added that delays and procrastination on regulatory clarity are severely damaging.
The SEC’s actions are not just harmful policy; they are unlawful; and the consequences of the SEC’s continued delay are severe for that reason too.”
According to the filing, the SEC action conflicts with existing clauses in the constitution that are to protect the rights of businesses. It stated that “the SEC’s unwillingness to announce the rules of the road ex-ante, combined with its use of enforcement actions to impose or threaten liability ex-post, conflicts with the Due Process Clause and basic principles of administrative law.”
In March, the SEC issued a Wells Notice threatening legal action against Coinbase for violating securities laws. Notably, the regulator has been on an enforcement spree targeting various crypto firms including Kraken and Paxos.
After receiving the notice from the regulator, Coinbase executives have often tried expressing optimism about the matter and blaming the SEC for being biased. Additionally, the firm stated that it is ready to take the case to court if necessary. In April, Coinbase then filed a complaint against the SEC for not providing clarity on regulations. It stated that a clear answer on regulatory clarity for the industry has been met with silence.
Meanwhile, the SEC and its self-titled “cop on the beat” chairman continue to crack down on U.S. crypto companies. The regulator’s approach has been criticized frequently by lawmakers as well as industry participants. In fact, he was also summoned by lawmakers to clarify his stance towards crypto entities.
Ironically, even while testifying Gary Gensler, the chairman of the SEC, chose to reiterate his usual opinion stating that existing federal securities laws are sufficient to regulate the sector. Additionally, he highlighted the problem to be the crypto industry itself as they fail to comply with these rules.