Advocacy Groups Push for U.S. SEC Clarity in Crypto Regulations

A coalition of advocacy groups and prominent organizations is rallying behind Coinbase, urging the Securities and Exchange Commission (SEC) to introduce definitive regulations for the cryptocurrency sector. This movement, highlighted by recent amicus briefs submitted to the Third Circuit Court of Appeals, showcases a united front consisting of the Crypto Council for Innovation (CCI), Satoshi Action Fund, Texas Blockchain Council, investment firm Paradigm, digital asset company Lejilex, and the U.S. Chamber of Commerce. Their collective stance underscores the pressing need for regulatory clarity within the United States’ crypto industry.

These organizations emphasize the detrimental impact of the SEC’s ambiguous stance on digital assets, arguing it fosters uncertainty that could drive crypto businesses offshore. “The uncertainty and paralysis created by the SEC could cause digital asset companies to move out of the United States altogether,” a statement from the joint brief of the Satoshi Action Fund and Texas Blockchain Council points out. They stress the importance of establishing straightforward regulations, particularly when companies face potential legal repercussions for actions previously deemed compliant.

Supporting Coinbase’s appeal for regulatory guidance, these groups criticize the SEC’s reluctance to delineate which tokens fall under its regulatory purview as securities. The appeal, initiated by Coinbase in July 2022, seeks to compel the SEC to formalize its approach to the regulation of digital asset securities. “The Commission’s recent denial of Coinbase’s petition for rulemaking… flouts basic principles of fairness, diminishes faith in domestic markets, and will continue to harm consumers and innovators alike,” the CCI’s brief articulates.

Echoing these sentiments, the U.S. Chamber of Commerce highlights the broader implications of the SEC’s indecision, viewing it as a cautionary tale against regulatory inertia in the face of emerging technologies. “The SEC’s failure to provide clarity for this important new industry offers a case study in the dangers of refusing to adapt regulation to new circumstances,” the Chamber comments.