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Senator Lummis files amicus brief supporting Coinbase’s dismissal motion against SEC

Cointelegraph By Brian Quarmby by Cointelegraph By Brian Quarmby
August 13, 2023
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Senator Lummis files amicus brief supporting Coinbase’s dismissal motion against SEC
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The crypto-friendly United States Senator Cynthia Lummis has filed an amicus brief supporting Coinbase’s motion to dismiss the U.S. Securities and Change Fee’s (SEC) lawsuit against the agency.

An amicus brief is a doc filed in court docket by a celebration circuitously concerned with the associated case. It’s typically used so as to add supporting arguments to 1 facet of the lawsuit and emphasize how the case can have a broader impression past the concerned events.

As per the Aug. 11 filing within the U.S. District Court docket for the Southern District of New York, Lummis burdened that “that is no run-of-the-mill enforcement case.”

The senator asserted that with its lawsuit against Coinbase over alleged securities violations, the SEC is pushing to acquire “major affect” over the crypto sector at a time when regulation and different components are nonetheless “beneath lively consideration by Congress and a number of businesses.”

“The SEC brings this enforcement motion within the midst of debates within the halls of Congress and world wide about how crypto belongings needs to be regulated. The Structure empowers Congress—not the SEC—to legislate in such an space of profound financial and political significance.”

“Though the SEC seeks broad authority over crypto asset markets, most legislative proposals in Congress would as an alternative grant a lot of that authority to different businesses. Unhappy, the SEC seeks to avoid the political course of to commandeer that authority for itself,” she added.

Coinbase filed a motion to dismiss on Aug. 4, arguing that the SEC had “violated due course of, abused its discretion, and deserted its personal earlier interpretations of the securities legal guidelines” by asserting authority over the alternate.

Within the court docket submitting, Lummis went on to argue that the SEC has been overstepping its authority by claiming that nearly all crypto assets are securities, as she questioned the company’s supposed regulation-by-enforcement method, or what she described as an try and “legislate by enforcement.”

“The SEC’s try and shoehorn a complete new class of belongings into the present definition of a ‘safety,’ and thereby add to the definition enumerated by Congress, exceeds the SEC’s authority, encroaches on Congress’s lawmaking, and contravenes the separation of powers. The SEC can’t legislate by enforcement.”

Associated: SEC decision on Bitcoin ETFs won’t leave out Wall Street giants

Lummis isn’t alone in submitting an amicus brief supporting Coinbase’s motion to dismiss.

On Aug. 11, crypto advocacy teams, together with the Blockchain Affiliation, Crypto Council for Innovation, Chamber of Progress and Client Tech Affiliation, additionally submitted a joint submitting.

In an X (previously Twitter) thread asserting the transfer, the Blockchain Affiliation’s senior counsel Marisa Tashman echoed Lummis’ feedback that the “SEC’s regulatory authority extends solely to what Congress granted it,” as she highlighted the dangers of the SEC’s method to the sector:

“The SEC’s interpretation threatens to comb in lots of non-security belongings – this may’t be what Congress supposed when it granted the SEC authority to control securities.”

“The SEC takes the place that just about all digital belongings offered on the secondary market are funding contracts beneath the federal securities legal guidelines. However, these transactions contain no ongoing contractual obligations. The SEC’s place is incorrect,” she added.

Journal: Crypto regulation — Does SEC Chair Gary Gensler have the final say?