The North American Securities Administrators Association (NASAA) has filed an amicus curiae in support of the U.S. Securities and Exchange Commission (SEC) in its lawsuit against Coinbase. The NASAA argued that digital assets should not be treated as “somehow special” and that the SEC’s actions against Coinbase are not “novel or extraordinary.” They believe that established securities laws can be applied to digital assets without requiring explicit Congressional authorization.
One of the central issues in the lawsuit is expected to revolve around the Howey test, which is used to determine if something qualifies as an investment contract. Coinbase has argued that digital assets do not satisfy all aspects of this test. The NASAA countered that the Howey test was designed to be flexible enough to encompass technological advancements in the securities markets, including those involving blockchain-based securities.
The NASAA also dismissed Coinbase’s claims that the “digital asset industry” is a significant portion of the American economy, stating that digital assets are not widely accepted for everyday transactions or practical economic use cases beyond speculation.
NASAA Backs SEC in Lawsuit Against Coinbase, Argues for Digital Asset Regulation
NASAA, a group representing securities regulators from all 50 U.S. states, Canada, Mexico, and several U.S. territories, supported the SEC’s position and asked the judge to deny Coinbase’s motion to have the lawsuit dismissed.
This legal battle highlights the ongoing regulatory scrutiny of the cryptocurrency industry and the question of how traditional securities laws apply to digital assets and blockchain-based technologies. The court’s interpretation of the Howey test and its implications for future regulatory actions could have a significant impact on the industry.