One of the biggest problems with cryptocurrency is the current SEC Chairman’s efforts to discipline crypto through sanctions instead of laws. While the Ripple case has been on the agenda for years, the SEC has filed about 100 crypto cases so far. Two of the recent cases were about Coinbase and Binance. An American Senator made statements about the Coinbase case.
Coinbase Case
Senator Cynthia Lummis called on the New York district court to dismiss the lawsuit filed by the Securities and Exchange Commission against the cryptocurrency exchange Coinbase. According to her, the SEC’s ongoing battle contradicts the efforts of lawmakers. While legal regulations regarding crypto are being worked on and uncertainty prevails, the SEC’s exploitation of this gray area for sanctions fully demonstrates its negative stance towards crypto.
Recently, Lummis, who presented a comprehensive bill with Senator Kirsten Gillibrand to regulate digital assets, stated that the SEC is going beyond the limits when regulating crypto. Lummis, along with other stakeholders, submitted amicus briefs on Friday, requesting the dismissal of the lawsuit filed by the SEC against Coinbase. The SEC accused the exchange in June of operating as an unregistered exchange, broker, and clearing agency.
SEC Crossing the Line
We extensively explained the meaning of amicus briefs in the Ripple case. We can consider them as voluntary expert opinions. In her amicus brief, Lummis referred to the important questions doctrine, stating that if the agency wants to make a decision on a matter of great national importance, it should be supported by clear congressional authorization.
The important questions doctrine has two parts:
- Focuses on whether the subject has a significant impact on the national economy or the public.
- Focuses on whether a federal agency has clear authority to implement new regulations.
“First, the regulation of crypto assets is a matter of great economic and political importance. This issue has been the subject of dozens of congressional hearings and bills recently.”
Other companies also referred to the doctrine in a series of amicus briefs submitted on Friday. Venture capital firms Paradigm and a16z stated that the crypto industry has economic significance and highlighted that during the peak of crypto, it traded at high volumes of up to $500 billion per day.
Amicus briefs carry a response to the ongoing pressure on crypto companies, especially Coinbase. It is unknown how much the judge will consider them, but not all US officials agree on waging a war on crypto. We can see this as a glass-half-full perspective.
