Regulation
Digital Chamber Files LEJILEX Amicus Brief in SEC Case
The Digital Chamber of Commerce has filed a motion for leave to file amicus brief in the existing lawsuit that is between LEJILEX and Crypto Freedom Alliance of Texas (CFAT) against SEC.
The organization intends to assist in the plaintiffs’ goal of blocking the SEC from governing the digital assets sector without a legislative basis.
Digital Chamber Files LEJILEX Amicus Brief
The Digital Chamber has joined LEJILEX and the Crypto Freedom Alliance of Texas in their legal fight against the Securities and Exchange Commission (SEC).
This filing was made to support the plaintiffs’ claim that the SEC has been acting beyond its jurisdiction in trying to regulate digital assets under securities laws even in the absence of clear legislation. The amicus brief focuses on the importance of having well-defined and equitable rules and guidelines that are not detrimental to the development of the digital asset industry.
We’re stepping in. We’ve submitted a motion for leave to file an amicus curiae brief in the case of @lejilex and @CryptoFreedomTX v. @SECgov. Our goal? To support plaintiffs’ efforts to end the SEC’s attempt to regulate the #digitalasset industry WITHOUT legislative authority.… pic.twitter.com/gfTkJxNFxr
— The Digital Chamber (@DigitalChamber) July 11, 2024
Subsequently, the brief states that the actions of the SEC could have dire consequences for not only LEJILEX and CFAT but the entire digital asset industry. It raises the issue that if the court does not step in, the SEC will keep on increasing its enforcement activities unjustly, and might categorize numerous digital assets as securities with no clear rules.
SEC’s Regulatory Approach
LEJILEX which is planning to launch a trading platform known as Legit. Exchange, in particular, is exposed to legal risks as the position of the SEC remains ambiguous. The firm claimed that it is impossible to apply for registration as a securities exchange or a broker since the SEC has not issued rules on the registration of digital asset trading platforms yet.
In launching their trading platform, the plaintiffs claim that they are at risk of being subjected to enforcement actions by the SEC for operating an unregistered securities exchange.
The amicus brief filed by the Digital Chamber also provides a wider perspective of the extent of the SEC’s actions, with previous enforcement actions against major companies such as Coinbase and Binance cited as examples of overregulation.
Need for Legislative Clarity and Innovation Support
According to The Digital Chamber, the current approach by the SEC is unconstitutional because it encroaches on the role of Congress in regulating the digital asset industry.
They advocate for appropriate cooperation between the SEC and other federal agencies together with Congress to formulate guidelines that would help guide the industry participants on compliance expectations. They argue that this is necessary in order to encourage innovation and develop the digital asset industry in the United States.
Perianne Boring of The Digital Chamber Foundation and CEO of The Digital Chamber said,
“With this motion we are trying to act before the SEC extends its authority beyond the legal bounds in anticipation of its overreach.”
Similarly, Coinbase has also supported LEJILEX by providing an amicus brief that opposes the SEC’s regulatory power. Paul Grewal, the Chief Legal Officer of Coinbase, has taken issue with the SEC’s expansive approach to regulation and has urged Congress to provide clear guidance on the regulation of digital assets.
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