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The legal dispute that crypto asset management firm Grayscale started against the U.S. Securities and Exchange Commission (SEC) over the regulator’s rejection of its spot Bitcoin exchange-traded fund (ETF) got the backing of an industry giant, Coinbase.
Coinbase’s support was noted in an October 18 brief filed with the U.S. Court of Appeals for the DC Circuit, where Grayscale first reiterated how the SEC’s decision undermines investor’s freedom. It read:
“In so doing, the Commission has abandoned its investor protection mandate, and it has abused its discretion by engaging in arbitrary and capricious practice of picking winners and losers among investment products.”
Grayscale is supported by the Blockchain Association, the Chamber of Digital Commerce, Chamber of Progress and Coin Center who all support the firm’s stance and take part in the lawsuit as so called ‘amici curiae’ or impartial and voluntary advisors alongside crypto exchange giant Coinbase:
“This matter implicates critical regulatory and policy issues that may have wide-ranging implications for the digital assets and blockchain ecosystem. Thus, amici curiae have particular interests in elucidating areas where there is considerable need for greater regulatory clarity or consistency.”
The filing added:
“Counsel understands that the following amici also intend to submit briefs in support of the Petitioner: Coinbase Global, Inc. (“Coinbase”), the New York Stock Exchange (“NYSE”), the U.S. Chamber of Commerce, and certain former regulators and academics.”
Coinbase is among those acknowledging that the SEC’s oversight is a potential hindrance to innovation and adoption of crypto and blockchain. In September 2021, Coinbase abandoned its Lend program after the SEC threatened to take the company to court. A month later, the exchange’s CEO, Brian Armstrong criticized the agency on Twitter saying:
“The irony is that the people they are supposedly protecting, are the ones attacking them”
Grayscale recently said that it expects the legal battle with the SEC could still take another two years.