The Most Influential Business Organization in the US Just Came Out Fists Swinging Against the SEC’s Stance on Coinbase and Crypto Regulation

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The SEC's policy of maintaining deliberate ambivalence on what exactly constitutes a security in the crypto sphere just got cudgeled in court by the most influential business organization in the US, with the crypto exchange Coinbase appearing to benefit from this high-stakes endorsement.

For those who might be unaware, the SEC refuses to define the criteria that it uses to classify a particular cryptocurrency as a financial security. Instead, the apex regulator in the US continues to rely on an arbitrary "regulation by enforcement" policy that has significantly ramped up the regulatory uncertainty in the world's largest economy.

What's more, the SEC has often negated its own publicly stated stance on this issue. For instance, the SEC's Chair, Gary Gensler, is on record for stating that "everything else other than Bitcoin" was a security, thereby placing the vast majority of the crypto sphere under the SEC's jurisdiction. However, in a recent court document, the SEC admitted that it has yet to make a determination regarding the security status of Ethereum. In what further muddies the regulatory landscape, the CFTC has clearly stated that Ethereum is a commodity, thereby placing the world's second-largest crypto ecosystem within its jurisdiction.

To force the SEC's hand, Coinbase sued the apex financial regulator in the United States Court of Appeals for the Third Circuit back in April 2023. In its complaint, Coinbase argued that it had asked the SEC back in July 2022 to "propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native