Crypto analysts believe that the independent federal agency Securities and Exchange Commission (SEC), is creating a mess in the crypto space. This time the SEC is accused of unfairly trying to impose securities regulations and trying to label digital assets as securities.
On July 21, 2022, the US securities regulator announced insider trading charges against a former Coinbase product manager. Meanwhile, the cryptocurrency trade group Chamber of Digital Commerce argued that the case erroneously labeled several crypto assets as securities. Hence, the association requested the federal court dismiss a lawsuit the SEC filed against former Coinbase employees.
The founder and CEO of the Chamber of Digital Commerce, Perianne Boring, said, “This case represents a stealthy, yet dramatic and unprecedented effort to expand that SEC’s jurisdictional reach and threatens the health of the US marketplace for digital assets.”
On Wednesday, the association highlighted in a brief amicus filing that if the court proceeds with the SEC filing, it will cause a huge impact on the crypto market and investors. The group warned in its amicus brief that if the court rules in favor of the SEC, crypto exchanges that offer the nine tokens that the SEC has classified as securities could be subject to state and federal regulatory measures and “private litigation.” And it also affects the value of those tokens and investors.
Earlier, the Blockchain Association supported the ex-Coinbase manager Ishan Wahi and his colleagues who were accused in the case. On February 13, it filed an amicus brief arguing that the US regulator crossed its limits in the case. The brief stated, “The latest salvo in the SEC’s apparent ongoing strategy of regulation by enforcement in the digital assets space.” Earlier, Ishan Wahi had pleaded guilty to committing wire fraud.
The Chamber of Digital Commerce believes the SEC’s lawsuit is just a “backdoor” to classify crypto tokens as securities. The crypto sector has repeatedly criticized the SEC for filing regulatory action against the companies that deal in crypto assets. The SEC sued Ripple Labs Inc at the end of 2020 for marketing XRP tokens on its platform. The US regulator said that it comes under unregistered securities.
The US regulator Securities and Exchange Commission (SEC), recently charged Kraken with breaching the nation’s security laws. In response, the agency reported on Thursday that the crypto exchange agreed to shut off its staking service and pay $30 million in penalties to settle the case.
Source: https://www.thecoinrepublic.com/2023/02/23/sec-is-accused-of-sneaky-overreach-in-the-insider-trading-lawsuit/