SEC Acting Unlawfully With Coinbase: US Chamber of Commerce

The United States Chamber of Commerce has filed an amicus brief criticizing the Securities and Exchange Commission (SEC) in its case against Coinbase.

On May 11, the United States Chamber of Commerce filed a brief in support of crypto company Coinbase. In March, the SEC issued a Wells Notice threatening legal action against Coinbase for violating securities laws.

The brief stated that many of the Chamber’s members have a strong interest in regulatory clarity. It added that many of the members are also companies subject to U.S. securities laws.

However, these “may be adversely affected by the Securities and Exchange Commission’s current approach to digital assets,” it noted. The introduction gets straight to the point:

“As it stands today, nobody knows for certain which digital assets, if any, are “securities” under federal law. That is no small question.”

The Chamber of Commerce is the largest nonprofit business lobbying group in the United States, founded in 1912. It represents approximately 300,000 direct members. Indirectly, the organization represents the interests of more than three million businesses and professional organizations in every industry sector.

SEC Delays Are Damaging  

The Chamber went on to declare that the SEC’s actions were not just harmful to the economy but unlawful. It added that delays and procrastination on regulatory clarity are severely damaging.

“The SEC’s actions are not just harmful policy; they are unlawful; and the consequences of the SEC’s continued delay are severe for that reason too.”

It stated that SEC action conflicts with existing Constitutional Due Process clauses and Fair Notice rights.

“The SEC’s unwillingness to announce the rules of the road ex ante, combined with its use of enforcement actions to impose or threaten liability ex post, conflicts with the Due Process Clause and basic principles of administrative law.”

Court Will Have to Listen

On May 12, crypto legal expert ‘@MetaLawMan’ explained why this was a big deal. The Court will have to give these Chamber of Commerce arguments serious attention, he stated before adding:

“The largest, most influential, business organization in the U.S. has just declared it stands with crypto.”

Coinbase filed a complaint against the SEC in April. It simply sought a clear answer on regulatory clarity for the industry, yet it has been met with silence. Meanwhile, the SEC and its self-styled “cop on the beat” chairman continue to attack U.S. crypto companies.

In late April, Coinbase called for dialogue with the SEC. “A Wells Notice at this stage when there is not a clear rule book is not constructive and its not good for America,” said CEO Brian Armstrong.

“We are prepared to defend that position in court, but it doesn’t have to come to that,” he added. The SEC has not responded.