A coalition of legal and financial experts with blockchain expertise has united to provide backing for Coinbase's defense against the SEC. These experts argue that the SEC's interpretation of 'investment contract' is potentially detrimental to the cryptocurrency industry if accepted.

In early 2021, the US Chamber of Commerce filed a legal document asserting that the SEC's actions had harmed both Coinbase and numerous other businesses. Subsequently, in June, Coinbase faced legal action from the SEC for allegedly failing to register with them and for not ensuring that digital assets traded on their platform comply with securities definitions.

Critics have raised concerns that the SEC's definition of digital assets may be overly broad, potentially categorizing commodities and collectibles as securities. They also highlight that many digital assets derive value independently without relying on the efforts of others.

Eminent legal experts from institutions such as Yale, Chicago, and UCLA urged the court to consider whether cryptocurrencies bought on platforms like Coinbase could be deemed unregistered securities. The central question revolves around whether these instruments adhere to the Exchange Act of 1934 and the Securities Act of 1933.

Wyoming Senator Cynthia Lummis voiced her reservations about the SEC's authority in a submitted statement, deeming the SEC's actions against Coinbase unconstitutional as they impede Congress' regulatory oversight of the cryptocurrency industry.

Venture capital firms Andreessen Horowitz and Paradigm expressed concerns about the broader implications of the SEC's approach. They fear that the SEC's expansive definition of "investment contract" could impose constraints on both emerging and established businesses, hindering innovation and increasing compliance costs.

Various organizations, including the Chamber of Progress, the Blockchain Association, the Crypto Council for Innovation, and the Consumer Technology Association, jointly submitted an amicus brief in support of blockchain technology. They reiterate concerns that the SEC's use of the investment contract definition to classify digital assets could hamper innovation and entrepreneurship in the technology and digital sectors.

These supporters highlight the "major questions doctrine," arguing that administrative agencies should not assert authority explicitly denied by Congress. They assert that precise definitions are vital for market stability, growth, and fostering investment in new technologies.