Association Argues Against Treating Digital Assets as Special
An association of securities regulators has submitted an amicus brief in support of the U.S. Securities and Exchange Commission’s (SEC) legal action against Coinbase. The North American Securities Administrators Association (NASAA) argued that digital assets should not be treated as special and that Coinbase should not interpret the law narrowly to avoid regulatory compliance. NASAA also cited the Howey Test, a 1946 Supreme Court case, to support the SEC’s assertion that specific digital assets qualify as investment contracts subject to securities laws.
NASAA Upholds Existing Laws on Digital Assets
In its brief, NASAA emphasized that the SEC is simply upholding existing laws rather than implementing new policies regarding digital assets. The organization stated that agencies should not need specific congressional authorization to apply existing legislation to new financial market scenarios. While lawmakers have proposed bills to regulate cryptocurrencies, none have been passed yet.
Unanswered Questions about Cryptocurrency Regulation
NASAA also disputed claims that the major questions doctrine could be applied to the crypto sector. This doctrine requires explicit congressional authorization for matters of significant national importance. According to NASAA, digital assets cannot be considered a sufficiently significant component of the American economy, as most of them are primarily used for speculation rather than having real economic value.
Protecting Investors from Fraud and Abuse
NASAA represents state and provincial securities authorities in the United States, Canada, and Mexico with the aim of safeguarding investors from fraud and abuse. Some state securities regulators have filed legal cases against Coinbase and other businesses over the past year.
Hot Take: Association Supports SEC’s Legal Action Against Coinbase
The North American Securities Administrators Association (NASAA) has voiced its support for the U.S. Securities and Exchange Commission’s (SEC) legal action against Coinbase. NASAA argues that digital assets should not receive special treatment and that Coinbase should comply with regulatory requirements like other participants in the securities markets. The association emphasizes that the SEC’s assertion regarding investment contracts and digital assets is well within established law. NASAA also challenges the idea that the major questions doctrine applies to cryptocurrencies, stating that digital assets are not significant enough to warrant such consideration. Overall, NASAA stands behind the SEC’s efforts to uphold existing laws and protect investors from fraud and abuse in the crypto industry.
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