SEC finds support in its battle against Coinbase, details here
- The groups to file these briefs batting for the SEC against Coinbase are NASAA, NFI, and some legal scholars.
- The briefs emphasized regulators like the SEC can implement existing laws in emerging financial situations.
In an interesting turn of events, three amicus briefs have recently been filed that support the U.S. Securities and Exchange Commission (SEC) in its ongoing lawsuit against Coinbase [COIN].
The securities regulator sued the crypto exchange in June, alleging it violated securities law by working as an unregistered broker-dealer. Coinbase, in response, disputed all allegations. It asked the court to dismiss the SEC’s lawsuit, claiming the regulator has no jurisdiction over the crypto industry.
The three groups to file the latest amicus curiae are the North American Securities Administrators Association (NASAA), the New Finance Institute (NFI), and the Administrative Law Scholars.
What do these amicus briefs contend?
The NASAA is an association of securities regulators in the U.S., Canada, and Mexico. Former SEC officials, including former Chair Mary Jo White and Commissioner Robert Jackson Jr., have filed the brief on behalf of the NASSA. It argued that U.S. Congress has defined “security” broadly enough to regulate investments, in whatever form.
Under securities laws, crypto assets mentioned in the SEC’s enforcement action against Coinbase are considered investment contracts. Its staking program constituted an investment contract.
It is not only the SEC’s public position but also that of other state securities regulators around crypto assets, the brief contended.
The NFI is a finance-related public benefit corporation which also filed an amicus brief. It claimed neither “investing” nor “contract” are prerequisites to an “Investment Contract.” It also argued the SEC has the authority to regulate crypto assets.
The brief requested the court to deny Coinbase’s motion for judgment on the pleadings.
Todd Phillips, an assistant professor of law at the J. Mack Robinson College of Business at Georgia State University, and Beau Baumann, a doctoral candidate at Yale Law School, filed the third amicus brief on behalf of the Administrative Law Scholars.
The third brief centered on the “major questions doctrine.” It means that the Congress must clearly specify if it wants an authority to have power over key economic or political matters, rather than implying such authority in law.
Highlighting recent Supreme Court verdicts, the brief emphasized that any attempt by Coinbase to redefine or curtail the doctrine’s interpretation might be surpassing its limits.
The briefs emphasized that regulators such as the SEC can implement existing laws in emerging financial situations. In fact, the delays in eliciting explicit orders from the Congress impede regulatory efficacy.