The U.S. Chamber of Commerce called out the Securities and Exchange Commission (SEC) on Thursday, slamming the financial watchdog for its regulatory approach toward the digital asset industry.
It filed an amicus brief in support of Coinbase, which took the SEC to court last month. The exchange wants a court to force the SEC to respond to its so-called “petition for rulemaking” filed last July. The petition asks the SEC to propose and adopt rules for digital assets and answer questions related to regulation.
Now Coinbase has one of the largest business organizations in the world standing behind it. The U.S. Chamber of Commerce represents the interests of more than 3 million businesses and organizations throughout the country, from small businesses to global corporations, according to its website.
Amicus briefs are legal documents containing information or advice related to a specific court case and are provided by third parties. And the U.S. Chamber of Commerce accused the SEC of intentionally sewing uncertainty to keep the digital assets industry on ice.
“The SEC has deliberately muddied the waters by claiming sweeping authority over digital assets while deploying a haphazard, enforcement-based approach,” it wrote. “This regulatory chaos is by design, not happenstance.”
To be clear, Coinbase isn’t asking a court to force the SEC to adopt new rules for digital assets. The exchange simply wants a response, which it is legally entitled to within a reasonable amount of time. And the SEC’s lack of a response has “destabilized” the regulatory environment surrounding crypto, the U.S. Chamber of Commerce claimed.
Coinbase has staked its brand on regulatory compliance and transparency, yet it was hit with a Wells Notice in March, where the SEC warned it could soon take enforcement action against the exchange. The agency alleged Coinbase’s staking products are unregistered securities and referenced other parts of its business like Coinbase Wallet.
The U.S. Chamber of Commerce also argued the SEC’s regulatory approach conflicts with firms’ right to fair notice, where companies are required to have sufficient notice as to what’s improper behavior before action is taken against them
“The SEC’s actions are not just harmful policy; they are unlawful,” the U.S. Chamber of Commerce wrote, adding the agency’s refusal to “announce the rules of the road” in combination with actions conflicts with the right to due process.
Relying on enforcement actions to issue regulatory clarity is harmful in other ways, the U.S. Chamber of Commerce contends, stifling the public’s ability to play a role in providing input on how digital assets should be regulated.
“By proceeding through enforcement, the SEC has denied the public any opportunity to comment on its invocation of Depression-era laws to assert jurisdiction over a trillion-dollar industry,” it wrote. “It deprives the entire public of its right to be heard.”