A group uniting regional securities regulators in North America has backed the U.S. Securities and Exchange Commission (SEC) in its Coinbase lawsuit. The move goes against arguments in favor of adopting dedicated rules for crypto assets in the United States as opposed to implementing existing regulations.
Securities Regulators Association Throws Weight Behind SEC’s Position in Coinbase Case
The North American Securities Administrators Association (NASAA), which represents state and provincial level securities regulators in the U.S., Canada and Mexico, has filed an amicus brief supporting the SEC in its legal action against America’s leading crypto exchange, Coinbase.
The organization backed the SEC’s stance that certain crypto assets listed on Coinbase are securities and respectively subject to the Commission’s regulation. It also argued that the Howey test, used to determine whether an asset is a security, should apply to cryptocurrencies as well.
The NASAA urged the U.S. District Court Southern District of New York to “reject Coinbase’s attempt to narrow and misapply the established legal framework in order to avoid being subject to the same regulatory obligations as all other participants in the Nation’s securities markets” and insisted:
The Court should decline to rewrite the Howey test to allow digital asset enterprises to evade regulatory oversight … And the Court should decline to treat digital assets as somehow special.
In its lawsuit filed in early June, the SEC accused Coinbase of breaking federal securities laws by illegally operating a brokerage and clearing agency while allowing the trading of crypto assets that qualify as securities without registering as a national securities exchange.
In August, the cryptocurrency exchange urged the court to dismiss the SEC case, claiming that the securities regulator had “overstepped its statutory authority,” “abused its discretion,” and abandoned its own earlier interpretations of U.S. securities laws.
This month, the SEC asked a federal judge to reject Coinbase’s attempt to have the lawsuit tossed. In its filing now, the NASAA insisted that “the SEC’s theory in this case is consistent with the agency’s longstanding public position” and existing securities laws.
Do you think the NASAA’s amicus brief will help the SEC’s case in the Coinbase lawsuit? Tell us in the comments section below.