The United States Securities and Exchange Commission (SEC) has again been accused of overreaching its authority and arbitrarily classifying cryptocurrency holdings as securities in its latest investigation into insider trading by former Coinbase employees.
The Chamber of Digital Commerce, a US-based organization, filed a brief on February 22, arguing that the case should be dropped because it seeks to classify secondary market transactions as securities transactions and represents an expansion of the SEC’s regulation through an enforcement campaign.
Perianne Boring, the founder and CEO of the Chamber of Digital Commerce, claimed that the SEC’s actions represent a stealthy, dramatic, and unprecedented attempt to broaden the SEC’s jurisdictional reach and threaten the stability of the American market for digital assets.
She emphasized that Congress must first authorize regulators, as previously established by the Supreme Court, and that the SEC’s entry into the digital assets market was not authorized by Congress.
According to a tweet from the Chamber of Digital Commerce, the SEC continues contributing to a chaotic regulatory environment while acting without Congressional permission, endangering the very investors it is defending.
Today, with help from @WinstonLaw, we filed an amicus brief in @SECGov v Wahi arguing it should be dismissed as it represents an unprecedented expansion of the SEC’s campaign of “regulation through enforcement.”https://t.co/oPJd4Al1D2
— Chamber of Digital Commerce (@DigitalChamber) February 22, 2023
The Chamber also argued that the nine tokens listed by the SEC are not considered securities by the allocators who created them, the digital asset exchanges that made it possible to buy and sell them, or the various other organizations and people who acquire, trade, or use those tokens for business purposes.
The Chamber stated:
“We have serious concerns about @SECGov’s attempt to label these tokens as securities in the context of an enforcement action against third parties who had nothing to do with creating, distributing or marketing those assets.”
This brief follows a similar filing made on February 13 by the Blockchain Association advocacy group, which also accused the SEC of overstepping its bounds in the case and engaging in a strategy of regulation by enforcement in the digital assets space.
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