US Chamber of Commerce sides with crypto industry, blasts SEC US Chamber of Commerce sides with crypto industry, blasts SEC
The Chamber said the SEC's failure to establish a regulatory system for the crypto industry subverts due process.
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Updated: May. 12, 2023 at 3:56 pm UTC
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The U.S. Chamber of Commerce has sided with Coinbase and the crypto industry, blasting the Securities and Exchange Commission (SEC) over its regulatory approach.
In a May 9 court filing, the advocacy group presented several critical arguments about how the SEC deliberately muddied the waters by claiming sweeping authority over digital assets — while deploying a “haphazard, enforcement-based approach.”
The Chamber further argued that the SEC’s refusal to establish a regulatory system for the industry subverts due process, administrative law, and good governance. It added that the regulator’s effort amounted to a campaign to punish crypto firms for not adhering to a law they did not know how it applied to them.
SEC’s approach curtailing crypto growth
The advocacy group wrote that the crypto industry quickly grew into a trillion-dollar market in 2021 before the SEC began its regulatory shakedown.
The Chamber wrote that “the current Commission-fostered uncertainty has lowered the industry’s growth ceiling by discouraging further investment in digital-asset endeavors and inhibiting broader adoption of digital-asset products.”
It noted that this regulatory cloud leaves crypto firms with hard choices as they have to bear “unacceptable risk[s]” despite efforts at compliance.
The Ethereum question
The Chamber further highlighted the Commission’s inability to classify digital assets, citing Ethereum (ETH) as an example.
“As it stands today, nobody knows for certain which digital assets, if any, are ‘securities’ under federal law.”
According to the body, financial regulators — the Commodity Futures Trading Commission (CFTC) and SEC — cannot agree on whether it is a commodity or security. It noted that while the CFTC has consistently maintained that ETH was a commodity, the SEC has made “confused and conflicting
pronouncement” about the digital asset.
“Instead of clarifying these issues via a simple rulemaking, the SEC has dribbled out its legal views seriatim, interjecting broad pronouncements in informal speeches between fact-specific, one-off enforcement actions.”
Citing all of the above, the group said the SEC violates “Constitutional Due Process and Fair Notice Rights.” It added that the regulator’s failure to provide regulatory clarity had impeded further growth of the crypto industry with its “harmful” and “unlawful” approach, concluding that “digital assets are ripe for rulemaking.”
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