Crypto Council Supports Coinbase by Filing Amicus Brief Against SEC Regarding Regulatory Clarity
Crypto Council for Innovation (CCI) has come to the aid of Coinbase by submitting an amicus brief against the Securities and Exchange Commission (SEC) on March 18, 2024. This action was taken in response to the SEC’s rejection of Coinbase’s petition for rulemaking in December 2023, with Coinbase accusing the SEC of arbitrary behavior.
The legal battle between Coinbase and the SEC dates back to July 2022 when Coinbase urged the SEC to establish rules for the digital assets industry. However, the SEC ignored this request, leading Coinbase to file a mandamus proceeding to compel a response.
After facing additional delays and pressure from the Third Circuit, the SEC ultimately denied Coinbase’s regulatory request without providing a clear explanation. However, Coinbase challenged this denial, arguing that it was arbitrary, capricious, and violated the Administrative Procedure Act (APA).
In its amicus brief, CCI expresses its concerns about the SEC’s approach to regulating the digital asset industry. Specifically, it criticizes the SEC’s reliance on enforcement-based regulation, claiming that this method lacks transparency and hinders innovation.
CCI also highlights the lack of substantial justification in the SEC’s rejection of Coinbase’s regulatory request, stating that it did not meet the standards required by the APA. Additionally, CCI argues that the SEC’s refusal to engage in substantial rulemaking creates a regulatory void, leaving industry participants without clear compliance guidelines.
Furthermore, this lack of clarity drives businesses to seek regulatory certainty in other countries, undermining the United States’ position as a leader in the global digital assets financial system.
CCI’s support for Coinbase emphasizes the importance of clear regulations in the cryptocurrency industry. As Coinbase continues to challenge the SEC, stakeholders across the region are closely monitoring the developments that could shape the future of digital asset regulation in the United States.