Home CryptocurrencyBitcoin Trade group accuses SEC of “secretive” overreach in Coinbase insider trading case

Trade group accuses SEC of “secretive” overreach in Coinbase insider trading case

by SuperiorInvest

The US Securities and Exchange Commission has once again been accused of overstepping its authority and unfairly labeling crypto assets as securities, this time in its insider trading case against former Coinbase employees.

In a Feb. 22 amicus brief, the U.S.-based Chamber of Digital Commerce he argued the case should be dismissed because it represented an extension of the SEC’s “regulation by enforcement” campaign and seeks to characterize secondary market transactions as securities transactions.

“This case represents a subtle but dramatic and unprecedented effort to expand the SEC’s jurisdiction and threatens the health of the U.S. digital asset market,” wrote Perianne Boring, founder and CEO of the Chamber of Digital Commerce.

The chamber emphasized that the “SEC’s interference in the digital asset market” has never been authorized by Congress, and other Supreme Court cases have held that regulators must first be empowered by Congress.

“By acting without the authorization of Congress [the SEC] continues to contribute to a chaotic regulatory environment and harms the very investors it is supposed to protect,” she wrote on Twitter.

The chamber also argued that when the SEC filed securities fraud complaints, it was essentially asking a court to certify that the secondary market traded the nine digital assets listed in insider trading case against former Coinbase employee they represent securities transactions that she said were “problematic.”

“We have serious concerns [the SEC’s] to attempt to label these tokens as securities in the context of enforcement actions against third parties that had nothing to do with the creation, distribution or marketing of these assets,” Perianne added.

In its opinion, the chamber cited the case of LBRY v. SEC, in which the judge ruled that a transaction in the secondary market would may not be designated as securities transaction.

The judge was persuaded by a document from commercial contract lawyer Lewis Cohen, which pointed out that no court had ever recognized that an underlying asset was a security since the landmark SEC v. WJ Howey Co. ruling. – a case that set a precedent. to determine if a security transaction exists.

The latest amicus brief follows a similar filing from advocacy group Blockchain Association on February 13, which also argued that The SEC has overstepped its authority in that case, arguing that it was “the latest salvo in the SEC’s apparent ongoing strategy of regulation through enforcement in the digital asset space.”

Related: Gary Gensler’s SEC plays the game, but not the game you think

An amicus brief is filed by an amicus curiae, or “friend of the court,” which is an individual or organization that is not involved in the case but can assist the court by offering relevant information or insight.

In July, the SEC sued former Coinbase Global product manager Ishan Wahi, brother Nikhil Wahi and associate Sameer Ramani, alleging the trio used confidential information got Ishan to earn $1.5 million from trading 25 different cryptocurrencies.

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