The Securities and Exchange Commission (SEC) is under fire from the US Chamber of Commerce for its lack of clarity regarding which digital assets are securities under federal law. This issue has “tremendous implications for everyone involved in the $1 trillion digital asset economy,” a filing in court by the States of the House.
According to the filing, the SEC has refused to engage in any systematic process or regulation to explain what its claimed authority means, instead offering ad hoc enforcement actions and public speeches. This has created regulatory uncertainty and destabilized the regulatory environment for digital assets.
In July 2022, Coinbase petitioned the SEC to initiate regulation regarding digital asset securities. He urged the Commission to answer fundamental questions such as “which digital assets are securities?” More than 1,700 commenters echoed Coinbase’s call, but the SEC expressed no interest in responding to Coinbase’s request, according to the House. Coinbase then filed a lawsuit against the SEC to compel the regulator to act, hence the filing by the US Chamber of Commerce.
The SEC Chairman asserted that securities laws are unambiguous when applied to blockchain-based digital assets. Despite constructively rejecting Coinbase’s petition, the SEC declined to record its decision in a formal response.
According to the House, the SEC’s lack of clarity caused economic harm to Coinbase and the broader business community. Uncertainty discourages productive conduct and stifles innovation and undermines broader American economic and strategic interests. The continued uncertainty also has implications for the country’s geopolitical interests and the continued primacy of the dollar, given the growing relevance of digital assets to international monetary policy.
The SEC’s refusal to engage in rulemaking or respond to Coinbase’s rulemaking petition has destabilized the regulatory environment for digital assets, the House says.
“Agencies typically provide regulatory clarity by promulgating rules of general application,” the filing said. “This preference for rule-making has significant advantages: it forces agencies to put their regulatory plans on paper, and it provides fixed, forward-looking effective dates that ensure parties can put their conduct into effect. compliance with the law rather than being held accountable later for breaching their obligations, they did not know it existed.