Crypto Kinfolk Rally ‘Round Coinbase in SEC Rodeo Standoff

[CryptoButthead.com , msch , May 11, 2023] Well, now, the crypto folks are bandin’ together tighter than a new pair of jeans, standin’ shoulder to shoulder with Coinbase (COIN). They’re gearin’ up to give a good ol’ fashioned challenge to the U.S. Securities and Exchange Commission’s (SEC) “come on in and register” hollerin’ that’s aimed square at the digital assets sector.

This week, a bunch of “amicus” briefs were filed by several crypto clans, joinin’ forces with the U.S.-based exchange. They’re all adamant that the SEC is just plain messin’ with the young industry, insistin’ there ain’t nothin’ special ’bout crypto that needs different treatment under them securities laws. The U.S. Court of Appeals for the Third Circuit done said yes to the groups’ request to join the ruckus on Thursday.

Paradigm, a firm that invests in digital assets businesses, got all riled up and declared, “The digital-assets industry is stuck in limbo, simultaneously told to ‘come in and register’ yet having no effective means of doing so.” They went on to say, “It is no surprise that the SEC’s actions have crippled a nascent industry and sown confusion among countless firms unable to conform to the SEC’s view of the law or challenge that view in court.”

These filings – which are just a fancy way of sayin’ outside parties can lend a hand to legal arguments – are heapin’ support on Coinbase’s askin’ from two weeks back. They want to make the SEC answer to an early 2022 petition to clear up where crypto sits in securities regulation. SEC Chair Gary Gensler don’t seem to want to make special rules for crypto, but he’s gotta respond by May 13 to this legal spat.

And get this, even the U.S. Chamber of Commerce – a big ol’ organization that advocates for U.S. business – has spoken out ‘gainst the SEC’s behavior.

In their brief, the Chamber had this to say, “Nobody knows for certain which digital assets, if any, are ‘securities’ under federal law.” They added, “That is no small question. It has immense implications for every person involved in the $1 trillion digital-asset economy, and it is the threshold regulatory question from which all others flow.”

The Crypto Council for Innovation, an industry advocacy group, also argues “the SEC’s aggressive stance towards those seeking to comply impairs investors’ ability to differentiate the good organizations from the bad as they are all painted with the same brush by the SEC.”

It looks like the legal showdown between the SEC and Coinbase – just one of many the regulator is fightin’ in the crypto space – is about to get a whole lot louder. The SEC’s been warnin’ Coinbase they’re gonna be targeted for not followin’ securities laws.

SEC Chair Gensler keeps invitin’ crypto tradin’ platforms and token efforts to come on into the agency and properly register. He put out another video last month, warnin’ investors ’bout crypto and accusin’ much of the industry of openly defyin’ securities laws.

With the SEC lawsuits and court actions heatin’ up, it’s lookin’ more and more like court decisions will be drivin’ the future of crypto oversight in the U.S.