The Blockchain Association has released a comprehensive document backing Coinbase option on the legal rationale behind its argument calling for the recusal of Securities and Exchange Commission Chair Gary Gensler from any decision-making processes. This is regarding the initiation or continuation of an enforcement action based on the assertion that a digital asset qualifies as a security.
The association said Chair Gensler’s consistent public assertion that ‘everything other than bitcoin’ should be considered a security, raises concerns and creates, at the very least, an appearance of a closed-minded approach to this matter.
By repeatedly expressing this viewpoint, Chair Gensler has essentially pre-judged the core issue involved in enforcement proceedings related to digital assets.
Consequently, his vote on whether to pursue filing an action becomes compromised by bias, thereby infringing upon the due process rights of the subjects under investigation.
The SEC’s Approach To Digital Assets Raises Concerns
The Blockchain Association continues that the recent surge in enforcement actions by the US Securities and Exchange Commission against prominent digital asset companies has prompted widespread speculation that the agency is effectively pushing for an unofficial ban on digital assets within the United States.
Related Reading: Gary Gensler Crypto Litigation Tactics Challenged By Ex-SEC Chair
Amidst this perceived anti-crypto campaign, the SEC has seemingly neglected one of its fundamental responsibilities: providing clear and transparent rules and guidance that enable investors, entrepreneurs, and the public to ascertain the applicability of securities laws to their products or services.
Instead of offering much-needed clarity on the classification of digital assets as securities, Chair Gensler’s actions have only served to further complicate the regulatory landscape.
This uncertainty has forced compliant crypto companies to reconsider the viability of their operations in the American market, as they grapple with the ambiguity surrounding their regulatory status.
Coinbase, Binance.US, And Trading Platforms Respond
The US Securities and Exchange Commission (SEC) has taken legal action against prominent cryptocurrency exchanges Coinbase and Binance.US.
Related Reading: Binance.US Resolves USD Withdrawal Woes, But Sounds A Warning Bell
On June 6, the SEC filed a lawsuit against Coinbase, alleging that the exchange operated its trading platform without proper registration as a financial securities exchange and broker. This is coming after similar charges were levied against Binance.US a day before.
Binance.US, established by Binance CEO Changpeng “CZ” Zhao to cater to US clients, has expressed concerns over its operations potentially coming to a halt.
In a court filing, the company highlighted the possibility of its assets being frozen if a US court ruled in favor of the SEC’s request. However, the court has ordered the US Securities and Exchange Commission and Binance.US to reach a compromise to avoid a complete asset freeze.
In response to the US Securities and Exchange Commission lawsuits and the ongoing regulatory landscape, trading platforms eToro and Robinhood have made the decision to delist multiple cryptocurrencies that have been specifically named in the SEC lawsuits as securities.
This action reflects the platforms’ efforts to navigate the evolving regulatory environment surrounding digital assets.
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