The U.S. Chamber of Commerce has voiced its support for Coinbase and the cryptocurrency industry. The Chamber has criticized the Securities and Exchange Commission (SEC) for its approach to cryptocurrency regulations in a court filing dated May 9. According to the advocacy group, the SEC has deliberately used a “haphazard, enforcement-based approach” to muddy the waters and claim sweeping authority over digital assets.
Regulatory Uncertainty Hinders Growth of Cryptocurrency Industry
The Chamber further argued that the SEC’s refusal to establish a regulatory system for the cryptocurrency industry undermines due process, administrative law, and good governance. The regulator’s efforts to punish cryptocurrency firms for not adhering to a law that they did not understand how to apply to them has led to a lower growth ceiling for the industry. The Chamber noted that the current regulatory uncertainty leaves cryptocurrency firms with hard choices as they have to bear unacceptable risks despite their efforts to comply.
The Chamber also highlighted the Commission’s inability to classify digital assets, citing Ethereum (ETH) as an example. The financial regulators, the Commodity Futures Trading Commission (CFTC) and SEC, are unable to agree on whether it is a commodity or security. While the CFTC has consistently maintained that ETH is a commodity, the SEC has made conflicting pronouncements about the digital asset.
The SEC’s failure to provide regulatory clarity has impeded further growth of the cryptocurrency industry with its harmful and unlawful approach. The Chamber concluded that digital assets are ripe for rulemaking, and the SEC should clarify these issues via a simple rulemaking. The SEC’s approach violates Constitutional Due Process and Fair Notice Rights, and cryptocurrency regulations need to be established to support the growth of the industry.