One of the Senate’s biggest cryptocurrency champions has come to embattled exchange Coinbase’s defense.
Sen. Cynthia Lummis, R-Wyo., on Friday (Aug. 11) submitted an amicus brief on behalf of the company calling for the dismissal of a Securities and Exchange Commission (SEC) lawsuit against Coinbase.
The brief — as well as briefs filed by a number of crypto lobby organizations — argues that the SEC overstepped its authority in filing suit against Coinbase in June, part of a larger crypto sector crackdown that also involved action against the world’s largest exchange, Binance.
“This is no run-of-the-mill enforcement case,” the brief says. “Through this case the SEC seeks primary influence over economic, political, and legal questions under active consideration by Congress and multiple agencies.”
The brief goes on to say it aims to highlight “the important questions implicated here, which are properly before Congress right now” as well as the “fundamental separation-of-powers principles that weigh strongly in favor of deferring to Congress rather than adopting the SEC’s novel and expansive view of its own authority.”
The filing came days after Coinbase submitted its own motion for dismissal of the suit, which accuses the company of operating as an unregistered national securities exchange, broker and clearing agency.
“Our core argument is simple — we do not offer ‘investment contracts’ as that term has been construed by decades of Supreme Court and other binding precedent,” the company’s chief legal officer, wrote on Twitter. “By ignoring that precedent, the SEC has violated due process, abused its discretion, and abandoned its own earlier interpretations of the securities laws.”
“It has been a truly humbling past 12 months for the crypto sector,” PYMNTS wrote at the time.
“The alternative value-transfer vehicle, which was supposed to revolutionize the traditional financial system with democratized and trustless access to digital assets, instead enabled one of the biggest financial frauds in U.S. history — the failure of FTX, which spurred a sector-wide crackdown by the [SEC].”
Last month, Lummis and Sen. Kirsten Gillibrand, D-N.Y., reintroduced The Responsible Financial Innovation Act, bipartisan legislation they say is designed to provide a comprehensive legal framework for policing and supporting the digital asset industry
“The crypto asset industry is here to stay,” Lummis tweeted.
First introduced last June, The Responsible Financial Innovation Act is unique in the bipartisan approach it takes — as well as how comprehensive, and long-awaited, the proposed legislation is, PYMNTS noted.
“Observers believe the senators’ bill is more ambitious than those currently under discussion within the House Financial Services Committee and the House Agriculture Committee because it tackles the majority of crucial issues under discussion as it relates to the digital asset sector’s viable go-forward future in America,” that report said.
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