In the backdrop of surging interest in the crypto space, regulatory talks have been swirling – especially in the United States where things are currently as clear as mud. Recently, Cody Carbone, the Vice President of Policy at the Chamber of Digital Commerce (CDC), voiced his unease about the approach the US Securities and Exchange Commission (SEC) has taken with the nascent industry. Carbone painted rather a grim image, describing the SEC’s moves as “unconstitutionally aggressive”.
This conversation isn’t new, but it seems to be taking on a new intensity. Carbone underscored the issue stating the SEC’s eagerness to enforce regulation may infringe upon certain constitutional values. He also raised concerns about the randomness of their actions – enforcement seems to be chosen over rule-making. This, according to him, brings ambiguity into the industry and makes it harder for companies to work on clear guidelines.
The real question plaguing the industry, however, is the tug of war over regulatory jurisdiction. Should digital asset regulation fall under the jurisdiction of the SEC or the Commodity Futures Trading Commission (CFTC)? It’s a question that continues to snag lawmakers and is yet to be definitively answered. Meanwhile, the ambiguity continues to put the US digital industry and its stakeholders at risk.
Determined not to be cornered, the CDC has involved itself in the ongoing legal wrangle between leading cryptocurrency exchange, Coinbase, and the SEC. The former stands accused of peddling unregistered securities through its prospective lending program. Coinbase, however, denies the allegations – openly critiquing the SEC’s unclear crypto-related securities stance.
In a bid to stanch the SEC’s attempts at exerting control over crypto without proper legislation, the CDC filed an amicus curiae brief in the Coinbase-SEC case. The industry association’s primary contention is that the regulatory body’s actions could drastically influence the course of the entire industry.
The CDC fears that the current ruckus is causing unwanted confusion and potential harm to the market. They argue that their intervention could help the courts comprehend the full implications of the SEC’s actions. A draconian regulatory approach not only interferes, they say, with the industry’s innovative dynamism but also potentially limits economic growth, job opportunities, and financial inclusivity.
Support for Coinbase isn’t limited to the CDC. Other crypto entities and industry groups have echoed this sentiment, rallying behind Coinbase, and arguing that the SEC’s current trend stunts innovation and hinders business operations in the country.