S. Cynthia Loomis Supports Coinbase in Legal Dispute with SEC
Background
Senator Cynthia Loomis of Wyoming provided a brief supporting Coinbase asked to dismiss the case against by the US Securities and Exchange Commission (SEC).
Loomis, a Republican, echoed it support of Crypto industry by providing a friend feed in symbiosis with Coinbase.
Amicus Brief
Coinbase’s Argument
The company wants a federal judge to dismiss a lawsuit against by the SEC for allegedly operating as an unregistered stock exchange, broker, and clearinghouse.
Coinbase says that the regulatory agency overstepped its mandate when it sued the stock exchange for alleged crimes. In its motion to deny, Coinbase stated that the transactions on its platform do not involve securities, and its status falls outside the competence of the organizer.
Loomis’ Criticism of SEC
Loomis, 68 years old, says the SEC’s approach to enforcing encryption runs counter to the class of devoted powers in the US Constitution. She says the agency is trying to legislate, which is a job of Congress.
Loomis also charges the SEC of attempting to bypass the ongoing political processes aimed at drafting regulations for the Crypto industry by intended usurpation of power for other agencies. She claimed the agency changed the meaning of the term “investment contract” found in Securities law of 1934 to give itself regulatory power over digital assets.
As a legislator who is also a member of Senate Committee on Banking, Housing, and Urban Affairs, Loomis insists that the SEC’s interpretation of its role in code regulation is ‘inconsistent’ with several pending bills being considered by the committee.
Responsible Financial Innovation Act
In July, the senator introduced a bipartisan bill sponsored by New York lawmaker Kirsten Gillibrand to regulate the cryptocurrency space and consumer protection. Called the Responsible Financial Innovation Act (RFIA), the bill defines the roles of various agencies in cipher regulation.
RFIA grants the SEC authority over tokens that were released in Initial Coin Offerings (ICOs) many years ago and meet the definition of investment contract transactions. However, it is considered that the most basic encryption assets are goods and should fall under the jurisdiction of the Commodity Futures Trading Commission.