• The Chamber of Digital Commerce has accused the SEC of trying to impose securities regulations via an insider trading lawsuit.
• The Chamber argued that the SEC was overstepping its authority and unfairly labeling crypto assets as securities.
• It also suggested that the SEC was asking the court to uphold that secondary market trades constitute securities transactions, which is “problematic”.
SEC Accused of Overreaching
The Chamber of Digital Commerce has accused the United States Securities and Exchange Commission (SEC) of trying to impose securities regulations via an insider trading lawsuit against a former Coinbase employee. The Chamber argued that the SEC was overstepping its authority and unfairly labeling crypto assets as securities.
The Chamber argued that in bringing claims of securities fraud, the SEC was essentially asking the court to uphold that secondary market trades in nine digital assets mentioned in the case constitute securities transactions, which it suggested would be “problematic.” It also noted that this expansion of jurisdiction had never been authorized by Congress and could ultimately harm investors if allowed to proceed.
“Regulation By Enforcement”
The Chamber highlighted what it referred to as the “SEC’s regulation by enforcement” campaign, which it claimed represented a stealthy yet significant effort by regulators to expand their jurisdictional reach into digital asset markets without Congressional authorization. This could ultimately have a damaging effect on U.S. markets for digital assets, according to the organization.
“Not A Healthy Policymaking Process”
Perianne Boring, founder and CEO of the Chamber of Digital Commerce wrote: “We have serious concerns about the SEC’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”. She went on to describe this approach as “not a healthy policymaking process” and urged for dismissal of this case instead.
Concerns Raised For Investors
The Chamber raised concerns that if this case were allowed to proceed then it would result in an array of consequences which would harm investors and threaten digital assets – something which should be avoided at all costs according to them.