The U.S. Chamber of Digital Commerce has filed a motion to dismiss the Securities and Exchange Commission’s (SEC) lawsuit against the global cryptocurrency exchange Binance, claiming the case lacks basis and logic.
U.S. Securities and Exchange Commission (SEC) has been having issues with cryptocurrency exchange Binance for a while now, and their ongoing battle has received vocal support from the U.S. Chamber of Digital Commerce, a prominent crypto advocacy group.
In an amicus brief filed on Oct. 19, the U.S. Chamber of Digital Commerce claims that the SEC’s actions against Binance’s U.S. operations are akin to “suing the equivalent of a grocery store selling oranges and other fruit.”
The Chamber’s brief reflects growing concerns in the crypto industry that the SEC’s approach to regulation is hindering innovation and driving crypto startups out of the United States. The Chamber argues that the SEC’s understanding of crypto is flawed and not aligned with reality.
The Chamber stated that ‘tokens alone are not securities, and the markets where they are traded are not securities exchanges.’
Under the leadership of Chairman Gary Gensler, the SEC has launched several enforcement actions against major crypto exchanges, such as Binance, Coinbase, and Kraken.
The SEC alleges that the exchanges violated securities laws by offering unregistered staking products and listing unregistered securities. The exchanges have responded by arguing that the SEC has not provided clear guidance on which cryptocurrencies are securities.
The Chamber has criticized the SEC’s approach, arguing that it fails to distinguish between digital tokens and the investment contracts that may exist around them. They also mentioned that this failure has led to the misclassification of many crypto tokens as unregistered securities.
The trade body stated that the U.S. has historically been a leading hub for technology innovation, but it is now falling behind in the growing blockchain economy due to an opaque and unfriendly regulatory environment.
The Chamber argues that the SEC’s approach is stifling innovation and causing many blockchain businesses to move offshore. It likens the SEC’s lawsuit against Binance to suing a grocery store for selling oranges and urges the court to distinguish between blockchain assets and the investment contracts that may surround them. The Chamber says that dismissing the case is essential to avoid further damage to the digital economy.