Several advocacy groups filed court briefs in support of Coinbase's appeal, calling on the U.S. Securities and Exchange Commission (SEC) to create clear rules for the crypto industry.
In separate March 18 filings with the Third Circuit Court of Appeals, the Council for Crypto Innovation (CCI), Satoshi Action Fund, Texas Blockchain Council, investment firm Paradigm, and digital asset firm Regi Rex, the U.S. Chamber of Commerce, said the SEC lacks clear guidelines. For market participants to succeed in the United States. Many of the filings argue that without clear rules of the road, businesses will be more likely to leave the country.
“The uncertainty and paralysis created by the SEC could result in digital asset companies leaving the U.S. altogether,” a joint filing from Satoshi Action Fund and the Texas Blockchain Council states. ing. “The need for clear rules with adequate notice, rooted in Congressional authority, would allow the SEC to impose ‘adverse effect’ and ‘liability’ on the digital asset industry for past actions taken in good faith. This is particularly important when [the SEC’s] Declaration. ”
Court briefs upheld Coinbase's appeal. This is part of a petition filed by crypto exchanges in July 2022 asking the SEC to establish rules regarding tokens that the SEC considers to be securities under its jurisdiction. The commission dismissed the petition in December 2023, about six months after filing an enforcement action against Coinbase for alleged violations of securities laws. Coinbase appealed this decision, prompting a recent round of court briefs.
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“The Commission’s recent rejection of Coinbase’s petition for rulemaking to define digital asset securities and govern the regulation of digital securities markets ignores fundamental principles of fairness and undermines confidence in the domestic market. “This is the latest in a long line of Commission decisions that have harmed, and will continue to harm, consumers and innovators alike,” the CCI's brief said.
The U.S. Chamber of Commerce added:
“The SEC's failure to provide clarity on this important new industry provides a case study in the dangers of refusing to adapt regulations to new circumstances.”
It is unclear when the appeals court will rule on the Coinbase case. The commission has already brought enforcement actions against crypto companies such as Binance, Coinbase, Kraken, and Ripple. On March 18, a U.S. district court sanctioned the SEC for acting in “bad faith” in its case against Debt Box, raising concerns from many about the commission's conduct in other cases.
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