Paradigm Backs Coinbase in Legal Battle Against SEC
Paradigm, a crypto investment firm, has shown its support for Coinbase in its ongoing legal battle against the U.S. Securities and Exchange Commission (SEC). In an amicus curiae brief filed on Monday, Paradigm criticized the SEC’s regulatory approach, accusing the agency of refusing to engage in proper regulation.
The SEC’s Regulatory Approach Under Scrutiny
The amicus curiae brief filed by Paradigm highlights the SEC’s heavy-handed regulatory approach and its reluctance to initiate a rulemaking process. According to Paradigm, the SEC’s enforcement-focused approach creates an unstable regulatory environment where attempts at compliance are met with punishment.
An amicus curiae brief, which translates to “friend of the court,” is filed by an individual or entity with relevant information that may influence the court’s decision. In this case, Paradigm’s brief aims to provide additional insights into Coinbase’s case against the SEC.
The legal saga between Coinbase and the SEC began in July 2022 when Coinbase sought regulatory guidance from the agency regarding digital assets. After the SEC denied Coinbase’s request, the crypto exchange platform decided to challenge the regulator in court.
Crypto Community Stands Behind Coinbase
Paradigm has previously demonstrated its support for Coinbase by submitting an amicus curiae brief on behalf of the crypto exchange platform in May 2023. In that filing, Paradigm argued that the SEC’s delay in providing regulatory clarity effectively banned digital asset trading platforms from operating within a clear regulatory framework.
The news of Paradigm’s latest filing comes on the same day that the Crypto Council for Innovation (CCI) also submitted an amicus curiae brief supporting Coinbase. The CCI expressed concerns about the SEC’s stringent regulatory approach, suggesting that it may drive crypto businesses to relocate overseas.
According to Ji Kim, General Counsel and Head of Global Policy for CCI, industry participants are already seeking more favorable regulatory environments in countries like the UK, EU, and parts of Asia Pacific. This shift could potentially diminish the United States’ leadership position in the global digital assets financial system.
Coinbase Contemplates Relocation
In response to the regulatory challenges faced in the U.S., Coinbase CEO Brian Armstrong has previously hinted at the possibility of relocating the company out of the country. Armstrong stated that “anything is on the table” if the regulatory environment does not become more favorable.
Paradigm’s brief concludes by emphasizing Coinbase’s request for clarity from the SEC regarding the application of century-old securities laws to the modern cryptocurrency industry. The firm believes that Coinbase simply wants a clear understanding of what is required to comply with existing regulations.
As of now, there has been no comment from the SEC regarding Paradigm’s amicus curiae brief.
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