Senator Cynthia Lummis from Wyoming backed Coinbase’s plea to drop the lawsuit filed against it by the U.S. Securities and Exchange Commission (SEC). By submitting an amicus brief, Lummis, a member of the Republican Party, reaffirmed her stance in favor of the cryptocurrency sector. Coinbase seeks a court order to quash the SEC’s case, accusing them of functioning without necessary registrations. They counter that since their platform’s transactions aren’t securities-based, the SEC lacks jurisdiction.
The 68-year-old Lummis contends that the SEC’s crypto regulatory actions infringe upon the U.S. Constitution’s separation of powers principle. She believes the SEC is wrongfully stepping into Congress’s shoes by attempting to create laws. She also charged the SEC with sidestepping existing regulatory pathways, thereby taking on roles designated for other bodies.
Lummis pointed out the SEC’s manipulation of the term “investment contract” from the Securities Exchange Act of 1934 to assert undue control over digital currencies.
As a member of the Senate’s Banking, Housing, and Urban Affairs Committee, Lummis emphasized that the SEC’s current crypto regulatory perspective clashes with multiple bills under the Committee’s review.
Previously in July, Lummis presented a joint bill with New York Senator Kirsten Gillibrand, named the Responsible Financial Innovation Act (RFIA), outlining the responsibilities of different agencies in overseeing cryptocurrencies. While the RFIA recognizes the SEC’s role in supervising tokens from initial coin offerings (ICOs) that fit the investment contract criteria, it categorizes base cryptocurrencies as commodities, suggesting that they be regulated by the Commodity Futures Trading Commission.