In its action against the cryptocurrency exchange Bittrex, the SEC has been criticized by Rodrigo Seira for exceeding its legal authority.
After Paradigm issued a petition to intervene, Seira gave his opinions in a conversation on Twitter on July 11 and argued that the U.S. The Securities and Exchange Commission’s (SEC) lawsuit against the American cryptocurrency exchange Bittrex needs to be “dismissed,” as it bases its arguments on an unjustified use of the Howey test.
Paradigm submitted an amicus brief on July 7, arguing that the financial regulator exceeded its jurisdictional boundaries.
Seira also noted in his thread that Gary Gensler, the chair of the SEC, had previously acknowledged that cryptocurrency exchanges lacked an acceptable regulatory framework, making it obvious that, in his opinion, the regulator lacked the power to control these secondary markets.
Similar arguments were raised in a July 7 blog post by Seira, who claimed that the SEC lacked jurisdiction over crypto assets since they did not include “investment contracts” and did not come under the agency’s purview.
He said, “Until the SEC engages in the rulemaking oinbase">Coinbase has requested, the digital-assets industry is stuck in limbo, simultaneously told to ‘come in and register’ yet having no effective means of doing so.”
After the SEC initially filed a complaint against Bittrex on April 17, the exchange decided to relinquish its Florida money transmitter license approximately two weeks later, specifically on April 30. Eventually, on May 8, Bittrex went on to file for bankruptcy.
This is also the second time Paradigm has lent support to a cryptocurrency organization that is being sued by the SEC.
Paradigm took action on May 11 by petitioning to submit an amicus brief in favor of oinbase">Coinbase. The brief asserted that the SEC had not adequately offered explicit regulations or guidance for digital asset companies operating in the United States.
