In a resolute move to shed light on the regulatory conundrum enveloping the cryptocurrency realm, the Crypto Council for Innovation (CCI) has taken a principled stand. On March 18, the esteemed council filed an amicus brief, lending its voice to Coinbase's legal battle against the Securities and Exchange Commission's (SEC) denial of its rulemaking petition.

The saga unfurled in December 2022, when the SEC delivered a resounding rebuke to Coinbase's petition, prompting the crypto giant to assert that the regulatory body had acted in an arbitrary manner. Enter the CCI, a collective of industry titans spanning the crypto ecosystem, united by a shared mission – to foster responsible global regulation.

Ji Kim, the council's General Counsel and Head of Global Policy, articulated the crux of their argument with unwavering conviction: "The SEC's pursuit of its flawed interpretation of securities laws through regulation by enforcement while refusing to engage in rulemaking is a violation of the Administrative Procedure Act (APA) and will continue to cause significant harm to the digital assets industry."

The amicus brief, a hallowed tradition in the legal realm, serves as a clarion call from the CCI, offering legal arguments and recommendations to the court, akin to a "friend of the court" lending its erudite perspective. Kim's voice echoed with urgency, "As further detailed in our amicus brief, the SEC has attempted to enshrine an arbitrary and baseless enforcement policy without giving interested parties an opportunity to contribute meaningfully to the rules the SEC now claims governs their actions."

This legal salvo comes on the heels of Coinbase's own offensive in March, where the crypto heavyweight filed a lawsuit against the SEC, seeking a court directive that would compel the regulatory authority to establish clear guidelines for the cryptocurrency sector. In their March 11 court submission, Coinbase challenged the SEC's lack of formal rulemaking, asserting that the agency's actions had hindered the industry's development and clarity.

The CCI's brief strikes at the heart of the matter, asserting that the SEC's refusal to engage in substantive rulemaking has perpetuated an unworkable regulatory blackhole, failing to provide a viable path to compliance for the crypto industry. Kim's words resonated with conviction, "Industry participants are fleeing abroad to countries that offer the needed regulatory guidance. And the U.S. is losing its role as a leader in the global digital assets financial system, unfortunately taking a back seat as other countries embark toward the technological frontier. This will deprive American consumers of access to digital assets, their diversification, decentralization, and manifold benefits."

The council's brief delved into the SEC's order denying the rulemaking request, decrying the agency's lack of meaningful detail or reasoning, encapsulated in a single, perfunctory sentence regarding the alleged "effectiveness" of the current system. "Such failure to engage is arbitrary and capricious and constitutes a violation of the APA, which requires much more," Kim asserted.

In a poignant summation, the CCI invoked the words of the SEC's first Chair, a promise etched in the annals of regulatory history: "If a business does the right thing, it will be protected and given a chance to live, make profits and grow. . . Honest business needs nothing more; the \[SEC\] promises nothing less." Yet, in the realm of digital assets, the council lamented, the SEC has unfortunately faltered in upholding that sacred vow.

Through this amicus brief, the Crypto Council for Innovation has taken a principled stand, championing clarity and accountability in the face of regulatory uncertainty. Their resolute voice echoes a clarion call for the SEC to embrace substantive rulemaking, fostering an environment where innovation can thrive while safeguarding the interests of all stakeholders. In this clash of titans, the battle lines have been drawn, and the CCI emerges as a stalwart ally, committed to illuminating the path toward a responsible and prosperous future for the crypto industry.