Chamber Of Commerce Backs Coinbase, Slams SEC Regulatory Approach Toward Crypto Assets

The U.S. Chamber of Commerce has filed an amicus brief to support Coinbase and the digital assets sector as the crypto exchange demands that the Securities and Exchange Commission (SEC) respond to its request for clarity on crypto asset regulation.

"The SEC has expressed no interest in addressing Coinbase's requested rulemaking," read the brief dated May 9. The SEC's "continued refusal to resolve Coinbase's rulemaking petition – and its attendant refusal to engage in rulemaking specific to digital assets – is causing substantial economic harm to both Coinbase and the broader business community," the Chamber added.

An amicus brief is a legal document filed in court that contains advice or information from an organization or individual that is not directly involved in a particular case.

The Chamber went on to back Coinbase's claim that the SEC was violating its obligation of responding timely to requests for rulemaking by making the exchange wait months for a response.

Late last month, Coinbase took the SEC to court through a filing that demanded the financial regulator respond to the exchange's request for clarity on crypto regulation in the U.S.

In its July 2022 petition to the SEC, Coinbase said the financial regulator should initiate a "public dialogue" that should help build the necessary regulatory framework for the digital assets industry.

The exchange also noted that the SEC should clarify which specific digital assets were identified as securities and how securities laws apply to cryptocurrency.

On May 5, the Third Circuit Court of Appeals gave the Commission a 10-day deadline to respond to Coinbase's request earlier this month.

SEC chairman Gary Gensler has said in the past that all digital assets except Bitcoin were securities. Gensler said, thus, only Bitcoin was not under the SEC's watch.

Crypto lawyer Jake Chervinsky argued that the regulator should prove in a court of law that it had actual jurisdiction over crypto assets. "The SEC lacks the authority to regulate any of them [digital assets] unless it proves its case in court," Chervinsky said.

In March, the SEC slapped Coinbase with a Wells notice - which expresses the regulator's intent to enforce action against a company - alleging that the exchange's staking products were unregistered securities.

At the time, a person with knowledge of the matter told Decrypt that the exchange was "confident" it could defend itself in court.

Coinbase's chief legal officer Paul Grewal has since shared the exchange's response to SEC's "vague and broad" Wells notice in a blog post. "We do not relish litigation against the SEC, but we will vigorously defend ourselves – and stand up for the rule of law for everyone," Grewal wrote.