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Chamber of Commerce Highlights Impact of SEC's Treatment of Digital Assets in Coinbase Lawsuit

The Chamber argues that the SEC's lack of clear regulatory guidance on digital assets hampers innovation and disrupts fair practice.

Fri, 12 May 2023, 12:55 pm UTC

As one of the world's largest business associations, the Chamber of Commerce represents approximately 3,000 businesses across various sectors in the United States. Its recent involvement in the legal dispute between Coinbase and the Securities and Exchange Commission (SEC) has brought attention to the profound influence of the SEC's treatment of digital assets and related firms under U.S. securities laws.

In its brief, the Chamber emphasizes its mission to advocate for the interests of its constituents in Congress, the Executive Branch, and the federal judiciary. It frequently serves as an amicus curiae in lawsuits that generate controversy or concern within the commercial sector.

The Chamber begins its filing by highlighting the ambiguity surrounding the categorization of digital assets as "securities" under federal legislation. This lack of clarity has significant consequences for the digital asset economy, which now exceeds a valuation of $1 trillion.

Despite the enormous scale of cryptocurrency markets and their future potential, the SEC's guidance to firms has been inadequate. The agency continues to initiate enforcement actions and release confusing and inconsistent public announcements.

The Chamber argues that the SEC's reluctance to engage in rulemaking or establish a systematic procedure violates principles of due process, administrative law, and effective governance.

According to the Chamber of Commerce, the SEC's unclear guidelines on digital assets as securities impede innovation and complicate decision-making for businesses. It also claims that the SEC's lack of a structured approach and inconsistent enforcement actions create instability in the regulatory climate for digital assets. The Chamber further alleges that the SEC's failure to provide clear guidance violates Constitutional Due Process and Fair Notice Rights, leading to increased regulatory uncertainty and hindering fair practice.

The Chamber firmly states that the SEC's actions are detrimental and unlawful. It argues that legal ambiguity hampers productive behavior and stifles innovation, an argument recognized by the courts. The involvement of the Chamber in the Coinbase vs. SEC lawsuit is seen as a significant indication of the case's gravity within the cryptocurrency community. The verdict could have far-reaching implications for the digital asset industry and its regulatory framework in the United States.

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