The Crypto Council for Innovation, along with crypto investment firm Paradigm, the U.S. Chamber of Commerce, and various industry stakeholders, have submitted amicus briefs in solidarity with Coinbase’s push for the SEC to establish definitive regulatory guidelines for the cryptocurrency sector.
In filings submitted on Monday to the Court of Appeals for the Third Circuit, these groups emphasized the need for regulatory clarity in the crypto space, citing concerns over the SEC’s lack of clear guidelines and the potential impact on businesses operating in the United States.
Coinbase and the SEC have been engaged in a protracted debate over the necessity of specific regulatory frameworks for crypto. While Coinbase initially petitioned the SEC for formal rulemaking in July 2022 and subsequently sued the agency in April 2023, the SEC has maintained that existing regulations are sufficient to govern the crypto industry. Coinbase’s recent appeal to the court seeks to compel the SEC to initiate rule-writing procedures.
The ongoing legal dispute occurs amid the SEC’s enforcement actions against several major crypto firms, including Coinbase, for allegedly operating as unregistered exchanges.
The Crypto Council for Innovation (CCI) underscored in its amicus brief the detrimental impact of the SEC’s ambiguous enforcement policies on industry participants. CCI criticized the SEC’s reliance on evolving interpretations rather than formal rulemaking, driving regulatory uncertainty and prompting some businesses to relocate to jurisdictions with clearer regulatory frameworks.
The U.S. Chamber of Commerce echoed similar concerns, highlighting the adverse economic consequences resulting from the SEC’s reluctance to provide clear regulatory guidance for the digital asset economy.
Paradigm, a leading crypto investment firm, emphasized the fundamental differences between crypto assets and traditional securities in its amicus brief. Paradigm argued that the SEC’s conventional disclosure requirements do not align with the decentralized nature of crypto networks, thereby necessitating tailored regulatory approaches.
The filings collectively advocate for a more transparent and predictable regulatory environment, emphasizing the importance of regulatory clarity for fostering innovation and sustaining investor confidence in the crypto industry.