The Securities and Exchange Commission (SEC) is facing criticism from the US Chamber of Commerce for its lack of clarity regarding what digital assets are considered securities under federal law. This case has “tremendous implications for everyone involved in the trillion dollar digital asset economy,” A.J Court filing by states.
According to the filing, the SEC declined to engage in any systematic process or establish rules to explain what its alleged authority meant, instead offering one-off enforcement actions and public letters. This has created regulatory uncertainty and destabilized the regulatory environment for digital assets.
In July 2022, Coinbase petition The Securities and Exchange Commission to begin setting rules regarding the securities of digital assets. She urged the Commission to answer basic questions such as “Which digital assets are securities?” More than 1,700 commentators echoed Coinbase’s call, but the SEC has shown no interest in addressing Coinbase’s request, according to the Chamber. Coinbase then sued the SEC in order to force the regulator to take action, which is where the filing by the US Chamber of Commerce comes from.
The chair of the Securities and Exchange Commission emphasized that securities laws are unambiguous as they apply to blockchain-based digital assets. Although Coinbase’s petition was constructively denied, the SEC declined to memorialize its decision in an official response.
According to the Chamber, the SEC’s opacity has caused economic harm to both Coinbase and the broader business community. Uncertainty deters productive behavior, stifles innovation, and undermines broader U.S. economic and strategic interests. The continued state of uncertainty also has implications for the country’s geopolitical interests and the continued primacy of the dollar, given the growing importance of digital assets in international monetary policy.
The chamber said the SEC’s refusal to participate in rule-making or to respond to Coinbase’s rule-making petition destabilized the regulatory environment for digital assets.
“Agencies typically provide regulatory clarity by issuing rules of general application,” the filing says. “This preference for rule-making has important benefits: it forces agencies to put their regulatory plans on paper, and provides for firm, future effective dates that ensure parties can bring their behavior into compliance with the law rather than be held liable later for breaches of duties they did not know existed.”