U.S. Senator Cynthia Lummis has filed an amicus brief in support of Coinbase’s motion to dismiss the U.S. Securities and Exchange Commission (SEC) lawsuit. In her brief, Senator Lummis highlights the ongoing debates in Congress regarding cryptocurrency regulation and argues that the court should dismiss the SEC’s case, allowing Congress to develop balanced regulations. This article will analyze Senator Lummis’ arguments and shed light on the importance of Congress in regulating the crypto market.
Senator Lummis emphasizes that Congress, not the SEC, holds the power to legislate in the realm of cryptocurrencies. She asserts that the Constitution grants this authority to Congress, stating that the SEC’s attempt to regulate cryptocurrencies exceeds its power and encroaches on Congress’ lawmaking. Furthermore, she argues that the SEC’s classification of most cryptocurrencies as securities is an attempt to grab power and circumvent the lawmaking process.
While acknowledging the shared interest of both Congress and the SEC in investor protection, Senator Lummis points out that current legislative bills primarily entrust oversight of the crypto market to another agency. She suggests that the SEC’s pursuit of regulatory authority over cryptocurrencies is unsatisfactory and seeks to bypass the political process. Instead, Congress should be the appropriate body to establish a framework for regulating crypto assets, as it reserves the fundamental task of defining assets falling within the SEC’s purview.
Drawing on the principle of the separation of powers, Senator Lummis asserts that only Congress has the authority to create laws concerning major questions of national and economic significance. By expanding its influence and authority through a “novel interpretation” of the definition of securities, the SEC exceeds its designated role and contravenes the lawmaking process. Lummis firmly states that the SEC cannot legislate by enforcement, calling into question its attempt to categorize cryptocurrencies as securities.
While acknowledging that Congress may grant the SEC the authority to regulate crypto assets, Senator Lummis emphasizes that it is ultimately Congress’ decision to make. The SEC cannot unilaterally usurp this decision-making process. By bringing the case against Coinbase, the SEC seeks to gain influence over matters that are already being debated in Congress. However, Lummis highlights that most of the current crypto regulation bills recommend agencies other than the SEC to regulate the majority of the crypto market. This reinforces the argument that the SEC’s claim of authority over the new sector is inconsistent with active legislative efforts.
Senator Cynthia Lummis’ amicus brief in support of Coinbase’s motion to dismiss the SEC lawsuit provides a critical analysis of the SEC’s attempt to regulate cryptocurrencies. She underscores the importance of Congress in developing balanced regulations and emphasizes that the SEC’s actions contravene the lawmaking process. Lummis firmly states that Congress, not the SEC, holds the authority to legislate in such a significant area, and the SEC’s expansion of power exceeds its mandate. The ongoing debates in Congress regarding cryptocurrency regulation highlight the need for careful consideration and appropriate regulatory frameworks to protect investors and foster innovation in the growing crypto market.