Coinbase Chief Legal Officer Paul Grewal said on July 4 that, judging by a recent Supreme Court opinion, the U.S. Securities and Exchange Commission’s (SEC) interpretation of an “investment contract” violates the law. Stated.

Twitter on July 4th threadGulwal argued that the SEC’s interpretation contradicted the Supreme Court’s key issues doctrine view in the Nebraska case. He added that replacing “secretary” with “chairman” and “digital assets” with “student loans” shows that the financial regulator’s interpretation violates the law.

Supreme Court Opinion

The opinion Mr. Guruwal mentions is that Biden vs. Nebraska About the legality of student loan debt cancellation. The Supreme Court disagreed with the Secretary of Education’s attempt to use the HEROES Act to establish a student loan forgiveness program, saying the Act does not confer such authority.

Grewal argued that the court’s reasoning in the student loan case could also challenge the SEC chairman’s interpretation of investment contracts involving cryptocurrencies. Commission Chairman Gary Gensler has repeatedly argued that current securities laws adequately regulate the cryptocurrency industry.

Coinbase executives say not only is the SEC’s “staggering” “economic and political weight” for allegedly pushing the envelope by claiming authority over all digital assets except BTC, but the company’s claims that it ignores a fundamental requirement of enforceable rights between and purchasers. .

“The ‘economic and political significance’ of falsely claiming title to all digital assets other than BTC is not only ‘staggering’, but also legally enforceable between companies and purchasers. It is not tied to the basic requirement that there be a certain right to

Grewal, meanwhile, said Congress could pass legislation in the future to resolve the issue of investment contract standards. Several US lawmakers are working on several bills to clarify regulation for the cryptocurrency industry.

How the SEC Interprets Investment Contracts

Despite the lack of specific legislation regulating cryptocurrencies in the United States, the SEC claims that most cryptocurrencies are classified as securities when the Howey test is applied.

Moreover websitethe SEC said:

“The Howie case and subsequent precedents of the U.S. Supreme Court have established that an ‘investment contract’ exists where funds are invested in a public company with a reasonable expectation of profit from the efforts of others. accredited.”

Several stakeholders disagreed with this view, but regulators have classified more than 60 crypto assets as securities based on their interpretation in various lawsuits.

A Coinbase official first appeared on CryptoSlate, arguing that the U.S. student loan ruling will set a precedent for the SEC on cryptocurrency regulation.

By Jules

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