The ongoing saga between the United States Securities and Exchange Commission (SEC) and crypto entities continues to unfold. A recent turn of events indicates that the SEC may be subtly revising its legal approach in the litigation against the likes of Coinbase and the crypto miner Green United.
On July 31, the SEC scored a notable victory when District Judge Jed Rakoff denied Terraform Lab’s motion to dismiss their case. The core of Terraform’s defense was rooted in the “major questions doctrine,” an argument that has also been wielded by Green United and Coinbase. Unfazed, on August 4, the SEC issued a filing claiming that this victory against Terraform Labs substantiates their authority to reject the major questions doctrine, teasing their potential strategy against Coinbase.
The major questions doctrine, established by a 2022 Supreme Court ruling, stipulates that policy decisions are the purview of Congress and not the domain of regulatory agencies without explicit authorization. Coinbase, in their motion to dismiss an SEC lawsuit on August 4, rested their case on this doctrine – that the SEC was overstepping its legal boundaries in areas it lacks clear authorization, such as the regulation of the secondary crypto market.
In the SEC’s view, the rejection of Terraform’s reliance on this doctrine might set a precedent that could stifle similar defenses from other crypto entities, like Coinbase. The words of the SEC couldn’t be clearer here: justifying their authority to declare a company’s digital assets as ‘investment contracts,’ they stated that the court had “rejected defendants’ arguments that the “Major Questions Doctrine” and the Due Process Clause “prevent the SEC from alleging the company’s digital assets to be ‘investment contracts,’”.
Importantly, the judge in the SEC vs Terraform case found that the major questions doctrine couldn’t be used to disrupt the routine work Congress expects the SEC and other administrative agencies to perform in all but exceptional circumstances. Considering this, the SEC might be boldening its stance in other cases involving crypto entities, including its lawsuit against Coinbase.
While the implication of this on the wider crypto sphere isn’t yet clear, it is evident that the ongoing dance between the SEC and crypto entities is poised to make history in the world of blockchain regulation. Until then, all eyes remain on the SEC’s next move.
Source: Cointelegraph
