The US Chamber of Commerce backed Coinbase’s request for the US Securities and Exchange Commission to write rules for cryptocurrency in a recent court filing.
The Chamber, which is the world’s largest business organization, said no one knows for certain which digital assets are securities under federal law.
“But remarkably, the Securities and Exchange Commission—despite proclaiming itself the primary regulator of digital assets—has refused to resolve this threshold question,” the Chamber said in an amicus brief filed on Tuesday.
The Chamber represents about 300,000 members from small businesses to global corporations, according to its website.
Coinbase filed a petition in July 2022 asking the SEC to propose and adopt rules for digital assets.
By not responding to Coinbase, the Chamber said the SEC is “substantial economic harm.”
“Industry confusion about the rules—and whether they can even be satisfied—hampers innovation,” the Chamber said.
The SEC’s delay on rulemaking also destabilized the regulatory environment for crypto, it said.
“This regulatory chaos is by design, not happenstance. The SEC has deliberately muddied the waters by claiming sweeping authority over digital assets while deploying a haphazard, enforcement-based approach,” the Chamber said.
Not done yet
Coinbase asked a federal appellate court in Philadelphia last month to compel the SEC to respond to that July 2022 petition, arguing that the agency has not been reasonable or prompt with its response.
The lawsuit alleged “the SEC refuses to address Coinbase’s rulemaking petition” even as the agency expresses intentions to initiate enforcement proceedings against Coinbase for listing allegedly unregistered securities.”
SEC investigating Coinbase
Coinbase has also been embroiled in a fight with the SEC following news that the exchange was served a Wells notice in March.
A Wells notice is a letter from SEC staff saying that the agency is ready to recommend formal charges to the five-member commission.
The exchange responded to the Wells notice on April 19 in a 73-page submission, arguing that the SEC has not “complied with the law” by allowing companies like Coinbase to register with the agency.
Notably, SEC Chair Gary Gensler has repeatedly said firms need to register with the agency and has said many cryptocurrencies are securities, falling under his agency’s jurisdiction.