US Chamber of Commerce criticises SEC's 'haphazard' regulatory efforts

The Securities and Exchange Commission has come under fire from the US Chamber of Commerce for its "haphazard, enforcement-based approach" to regulating the cryptocurrency market domestically. 

The U.S. Chamber of Commerce sided with Coinbase in an amicus brief submitted to the U.S. Court of Appeals on May 9, accusing the SEC of purposefully creating a risky and unpredictable environment for crypto firms operating in the nation.

US Chamber of Commerce criticises SEC's 'haphazard' regulatory attempts

The US Chamber of Commerce criticised the Securities and Exchange Commission for its "haphazard, enforcement-based approach" to policing the domestic bitcoin industry. In an amicus brief sent to the U.S. Court of Appeals on May 9, the U.S. Chamber of Commerce supported Coinbase and accused the SEC of deliberately fostering a dangerous and unpredictable environment for crypto businesses operating in the country.

It claimed that the SEC had "intentionally muddied the waters" by asserting broad control over digital assets and using an ad hoc, enforcement-based strategy.

"This regulatory chaos is not accidental; it is intentional."

The word "amicus brief," which is derived from the Latin phrase "friend of the court," denotes opinions or facts offered by outside parties who aren't directly connected to a particular legal dispute.

Chamber of Commerce also urged the SEC to quickly react to Coinbases' April 25 complaint, which asks the watchdog to address its "petition for rulemaking" and offer more precise regulatory standards for crypto companies doing business in the nation.

The lawsuit was made after the SEC sent a Wells notice to the cryptocurrency exchange in March over the firm's "potential violation" of American securities law.

It's important to note that Coinbase's case does not ask the court to order the SEC to establish new cryptocurrency-related regulations. Instead, the exchange is only asking for the commission to respond to its July petition, which it is constitutionally allowed to get in a "reasonable amount of time."

In response to this, the Chamber of Commerce asserted that the SEC's "refusal" to answer Coinbase or "otherwise engage in any rulemaking" is not only detrimental but also illegal.

The SEC's actions go beyond being bad policy; they are also illegal, and as a result, the repercussions of the SEC's ongoing delay are serious.

The financial regulator was also criticized by the Chamber of Commerce for not clearly stating which, if any, of the approximately 20,000 digital assets now in existence should be classified as "securities" under federal law.

It emphasized that "everyone involved" in the new, $1 trillion digital asset market would be affected by the answer to this issue, which would have "immense implications."

Surprisingly, the Securities and Exchange Commission has declined to answer this key point despite professing to be the major regulator of digital assets.

Not just the Chamber of Commerce is supporting Coinbase legally. The Coinbase co-founder Fred Ehrsam-led investment company Paradigm has requested to submit yet another amicus brief in support of the cryptocurrency exchange, stating the same thing: the SEC's actions have "crippled a nascent industry."