The United States Chamber of Commerce, the largest business federation in the world, has filed a brief criticizing the Securities and Exchange Commission’s (SEC) actions against crypto companies. The Chamber’s involvement in the Coinbase vs. SEC case reflects the significant impact of the regulator’s approach to digital assets and companies under the United States securities laws.
The Chamber emphasizes its role in representing the interests of its members before Congress, the Executive Branch, and federal courts. It regularly files amicus curiae briefs in cases that raise issues of concern to the business community. However, in this case, the Chamber highlights the lack of clarity surrounding digital assets and their classification as “securities” under federal law.
This uncertainty has far-reaching implications for the digital asset economy, valued at over $1 trillion. Despite the size of the crypto markets and its future valuation, the SEC has failed to guide firms. Instead, it continues issuing enforcement actions and confusing and inconsistent public statements.
The Chamber argues that the SEC’s refusal to engage in rulemaking or establish a systematic process undermines due process, administrative law, and good governance. The Chamber presents three key arguments in its brief.
First, it asserts that regulatory uncertainty stifles innovation in the United States. Without clear guidelines on which digital assets are considered securities, businesses hesitate to explore technologies that hamper growth and development.
Second, the Chamber argues that the SEC’s actions destabilize the digital assets’ regulatory environment. The lack of a framework and the reliance on enforcement actions create an unpredictable landscape for businesses operating in the space, making it difficult to make informed decisions.
Finally, they claim that the SEC violates “Constitutional Due Process and Fair Notice Rights.” By failing to provide clear guidance through formal processes, the SEC restricts the ability of federal courts to review and challenge its legal arguments, further exacerbating regulatory uncertainty and impeding fair treatment.
The Chamber firmly states that the SEC’s actions are harmful and unlawful. It argues that legal uncertainty inhibits productive conduct and stifles innovation, a concept recognized by the courts. Brad Garlinghouse, the CEO of Ripple Inc., a payment blockchain-based company, has repeatedly stated that the absence of regulatory clarity on crypto in the United States forces capital elsewhere and smothers innovation.
The SEC is suing Ripple’s executives, including Garlinghouse, for raising billions by offering XRP, a coin they claim is unregistered security. The crypto community views that the Chamber’s involvement shows how significant the Coinbase vs. SEC case is. The outcome could have far-reaching implications for the digital asset space and its regulatory framework in the United States.
The Chamber’s brief highlights the critical need for regulatory clarity in digital assets. With businesses operating in the industry still uncertain about security, innovation and growth are hampered, and the industry remains in legal limbo. The SEC must provide clear guidelines and engage in rulemaking to establish a systematic process that promotes good governance and regulatory stability. Ultimately, this will help businesses make informed decisions, promote innovation, and benefit the economy.