In a significant move on Thursday, the U.S. Chamber of Digital Commerce, a leading crypto policymaking advocacy group, filed an amicus brief urging the U.S. Securities and Exchange Commission (SEC) to dismiss its lawsuit against cryptocurrency giant Binance.
SEC’s Authority Questioned: Chamber of Digital Commerce Supports Binance
Founded in July 2014 by Perianne Boring, the U.S. Chamber of Digital Commerce is a Washington, D.C.-based trade association and advocacy group that promotes crypto assets and blockchain technology. On October 19, the group filed an amicus brief backing the world’s largest crypto exchange by trade volume, Binance.
In the brief, the Chamber stressed the importance of maintaining clear jurisdictional boundaries, cautioning against an overreach of the SEC’s authority. Extending U.S. securities law into areas unrelated to securities markets, they argue, could have unintended consequences for various sectors of the U.S. economy.
Diving into the crux of the issue, the Chamber elaborated on the nature of tokens. While they concur that tokens associated with “investment contracts” fall under the SEC’s purview, they argue that many tokens, once decoupled from their initial investment promise, should not be classified as securities. Transactions in such tokens, they emphasize, are mere asset sales.
The crypto advocacy group wrote:
The SEC is suing the equivalent of a grocery store selling oranges and other fruit, or an online e-commerce marketplace, like Amazon. Tokens alone are not securities, and the markets where they are available to buy and sell are not securities exchanges.
Highlighting recent court decisions, the Chamber pointed to cases where tokens were not deemed investment contracts. Particularly, they cited the “Ripple” case, suggesting that the very subject of an investment contract isn’t inherently a security. However, in the Ripple case, while XRP’s programmatic sales were not deemed securities, institutional sales are still contested.
The brief underscored the pressing need for a transparent regulatory framework for digital assets. Echoing Senator Cynthia Lummis‘ sentiments, the Chamber emphasized that Congress should provide unambiguous guidance to foster innovation while ensuring consumer protection.
Raising eyebrows at the SEC’s approach, the Chamber subtly hinted that the regulatory body might be stepping beyond its authorized limits. They urged courts to ensure the SEC’s actions align with the intentions set forth by Congress.
Wrapping up their arguments, the Chamber firmly advocated for the dismissal of the SEC’s case against Binance. Their plea was grounded in the belief that Binance’s actions didn’t warrant the charges levied against the exchange.
What do you think about the Chamber’s amicus brief urging the SEC to back down from the case against Binance? Share your thoughts and opinions about this subject in the comments section below.
