The U.S. Chamber of Commerce, a significant business organization representing approximately 300,000 direct members and three million businesses, has submitted an amicus brief in the ongoing Coinbase v. SEC case.
The brief supports Coinbase’s writ of mandamus against the Securities and Exchange Commission (SEC) on regulatory clarity for cryptocurrencies. The Chamber’s members have a strong interest in regulatory clarity.
Many of them are subject to U.S. securities laws that could be negatively affected by the SEC’s current approach to digital assets. As it stands today, no one knows for certain which digital assets are securities under federal law, a question with enormous implications for the trillion-dollar digital asset economy.
The SEC has refused to resolve this question and instead offered a series of one-off enforcement actions, leading to confusion and inconsistency.
The SEC has also declined to engage in any rulemaking or systematic process to explain its claimed authority, effectively disabling federal courts from reviewing its arguments. This subverts due process, administrative law, and good governance.
Coinbase petitioned the SEC in July 2022 to initiate a rulemaking regarding digital-asset securities and urged the Commission to answer basic questions such as which digital assets are securities. More than 1,700 commenters, including the Chamber, echoed Coinbase’s call.
However, the SEC has expressed no interest in addressing Coinbase’s requested rulemaking, stating that the securities laws are unambiguous as applied to blockchain-based digital assets.
SEC’s Delay On Coinbase Rulemaking Causing Economic Harm
The Chamber’s amicus brief argues that the SEC’s delay is causing great economic harm by chilling economic growth and innovation and destabilizing the regulatory environment for digital assets.
The SEC’s refusal to respond to Coinbase’s rulemaking petition or engage in rulemaking is causing substantial economic harm to both Coinbase and the broader business community. The SEC’s inaction is also substantially nullifying rights guaranteed by the Due Process Clause and the Administrative Procedure Act.
The SEC’s confusing and conflicting pronouncements have created a regulatory environment that is highly uncertain, with a future trajectory that is virtually unknowable.
Instead of clarifying these issues via a simple rulemaking, the SEC has dribbled out its legal views seriatim, interjecting broad pronouncements in informal speeches between fact-specific, one-off enforcement actions.
The Chamber’s amicus brief concludes that the Court must act to make certain that what can be done is done. The Court should grant Coinbase a writ of mandamus to compel the SEC to respond to its rulemaking petition and engage in rulemaking specific to digital assets. Additionally, the SEC’s continued delay is causing substantial harm and nullifying protected rights.
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