Multiple institutions on Friday filed a brief supporting US-based crypto exchange Coinbase in its prolonged legal battle with the Securities and Exchange Commission (SEC). The amici and amicus curiae brief, filed by about three blockchain-focused firms, expressed dissatisfaction with the SEC’s escalating campaign against cryptocurrencies and firms offering these digital assets.

Digital asset and blockchain trade association, the Chamber of Digital Commerce, venture capital firm Andreessen Horowitz (a16z), and crypto/web3 investment firm Paradigm Operations LP (Paradigm) all filed a brief in support of Coinbase in the lawsuit involving the crypto exchange and the US top regulator. 

A16z and Paradigm filed an amici curiae, while the Chamber of Digital Commerce filed amicus curiae. An amici curiae advise and assist courts on matters of law, but the amicus plays an advisory role and is not used in litigation.

SEC Destroying the Blockchain Sector

The institutions noted that the SEC’s approach to digital assets in America could have a lasting impact on the sector’s health in the long run. The SEC’s defiant attitude towards setting clear regulations on the industry and its uncurtailed expansion of regulatory authority on blockchain firms would produce a negative drawdown in the industry, the brief stated.

“The SEC’s regulation-by-enforcement approach is not only detrimental to the industry, it also directly impacts individual Americans who use digital assets. The regulatory ambiguity the SEC has created drives entrepreneurs away from the US markets and pushes those who remain,” the brief stated.

A16z and Paradigm’s amici suggested that Congress should end the regulatory uncertainty in the US by creating a new regulatory framework rather than allowing the SEC to continue to regulate the sector with its established limitations.

Institutions Plead Coinbase Acquittance

The three institutions asked the court to dismiss the SEC’s charges against Coinbase and grant its motion to create a clear regulatory framework. Coinbase filed that the SEC set out clear regulatory guidelines last year, and despite involving the court, the regulator seems adamant about responding to the request.

Instead of setting clear regulations, the SEC has issued lawsuits against several firms in the US for one reason or another. The regulator sued Coinbase and Binance for offering unregistered securities and forced Kraken to shut down its staking services after it termed the product a security. Coinbase’s CEO, Brian Armstrong, revealed that the SEC suggested that it unlist all tokens on its platform except for Bitcoin.

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