- Lummis questions the SEC’s broad interpretation of crypto as securities, suggesting that the agency has stretched its authority beyond reasonable limits.
- Senator argues SEC is pushing to obtain “primary influence” over the crypto sector at a time when regulation are still under active consideration by Congress and multiple agencies.
In a twist of events, Senator Cynthia Lummis of the United States has entered the fray of the ongoing legal battle between Coinbase, a prominent cryptocurrency exchange, and the U.S. Securities and Exchange Commission (SEC). Lummis has filed an amicus brief supporting Coinbase’s motion to dismiss the SEC’s lawsuit against the exchange, marking a noteworthy development in the cryptocurrency regulatory landscape.
Lummis’s brief asserts that the SEC’s lawsuit against Coinbase aims to establish a dominant influence over the cryptocurrency sector, a move she deems inappropriate given the ongoing debates about regulations and related factors taking place within Congress and other agencies.
The senator contends that while the SEC seeks expanded authority over cryptocurrency markets, the majority of legislative proposals within Congress lean towards vesting such authority in different agencies. This contrast, Lummis suggests, underscores the SEC’s attempt to sidestep the established political processes and assert authority for itself.
Coinbase, in its bid to counter the SEC’s lawsuit, filed a motion to dismiss on August 4. The exchange argued that the SEC’s actions violated due process, represented an abuse of discretion, and diverged from its own earlier interpretations of securities laws.
“The transactions over Coinbase’s platform and Prime are not, and do not involve, contractual undertakings to deliver future value reflecting the income, profits, or assets of a business. They are commodity sales, with the obligations on both sides discharged entirely the moment the digital token is delivered in exchange for payment,” the filing said.
Lummis further questions the SEC’s broad interpretation of cryptocurrency assets as securities, suggesting that the agency has stretched its authority beyond reasonable limits. She also criticizes the agency’s method of “regulation-by-enforcement,” describing it as an attempt to “legislate by enforcement.”
In a concurrent development on August 11, several crypto advocacy groups, including the Blockchain Association, Crypto Council for Innovation, Chamber of Progress, and Consumer Tech Association, joined forces to submit a joint filing supporting Coibase’s motion.