The world’s largest blockchain advocacy and trade group, the Chamber of Digital Commerce (CDC), has announced backing Coinbase in its legal and public relations battle with the U.S. Securities and Exchange Commission (SEC).
The Chamber of Commerce filed an amicus brief on Tuesday, claiming that the U.S. regulator’s antagonistic stance against crypto is causing significant economic harm.
Crypto Trade Group Files Amicus Brief In Coinbase v. SEC
CDC, a non-profit trade association that engages government officials on the use of crypto and blockchain, has filed an amicus brief in the ongoing court case between America’s leading exchange Coinbase and the SEC.
In the amicus brief — a legal document supplied to a court of law that allows a non-litigant to submit their expertise or opinion in a case as “a friend” of the court — the Chamber of Digital Commerce argued that by failing to respond to Coinbase’s July 2022 petition for sufficient regulatory guidance, the SEC is “causing substantial economic harm to both Coinbase and the broader business community.”
Filed on May 9, CDC says it is supporting Coinbase as it seeks formal rulemaking within the digital assets sector. In particular, the exchange wants the SEC to answer when a token sale constitutes an investment contract — and therefore qualifies as a securities offering.
The amicus brief also notes that the CDC has a strong interest in ensuring there is enough clarity around regulations applying to digital assets:
“Chamber’s members have a strong interest in regulatory clarity, and many of its members are companies subject to US securities laws that may be adversely affected by the Securities and Exchange Commission’s current approach to digital assets.”
In recent months, the SEC has pursued a spate of enforcement actions against what it considered issuers of unregistered securities. Recently, those crypto cases have come at a furious pace, with the SEC even boosting the size of its digital assets enforcement team.
The securities watchdog in March sent Coinbase a Wells Notice regarding aspects of the company’s staking service Coinbase Earn and Coinbase Wallet after a cursory probe, tipping it off that the regulator is building a case against it.
Chamber Says Innovation And Regulation Can Co-Exist
The Chamber of Commerce further argued in the brief that the lack of regulatory certainty in the U.S. is stifling innovation.
“The digital-asset industry offers a case study in how regulatory uncertainty undermines innovation. Before the Commission began rattling its saber, the industry grew quickly — reaching a trillion dollars in market capitalization by early 2021,” the amicus brief noted.
The trader group also has serious concerns about the SEC not testing its legal allegations in court because it forces most companies to settle its enforcement actions. The agency leaves crypto firms to “accept the risk of future litigation — and the associated financial burdens — or they can stop engaging in conduct that the agency might or might not ultimately target.”
The Third Circuit Court of Appeals recently ordered the SEC to respond to Coinbase’s complaint within ten days.
Meanwhile, Coinbase rolled out its international platform earlier this month via regulatory approval from the Bermuda Monetary Authority (BMA). Coinbase International Exchange will first list Bitcoin and Ethereum perpetual futures.