Senator Cynthia Lummis Fights Back Against Regulatory Overreach

The ongoing legal battle between Coinbase and the U.S. Securities and Exchange Commission (SEC) has taken a new turn as Senator Cynthia Lummis has stepped in to support the crypto exchange. She has filed an amicus brief, accusing the SEC of abusing its power and bypassing Congress to impose unclear rules on digital assets.

Lummis Challenges SEC’s Regulatory Tactics

On January 24, Senator Cynthia Lummis submitted an amicus brief to the U.S. Court of Appeals for the Second Circuit, siding with Coinbase in its legal dispute with the SEC.

In her filing, Lummis criticized the regulatory approach taken by the agency under former Chair Gary Gensler, stating that it lacks transparency and undermines the separation of powers.

Lummis argues that the SEC has been unfairly reinterpreting existing securities laws without clear guidelines and imposing those rules on crypto firms without prior notice.

Meanwhile, Lummis’s filing strengthens Coinbase’s case, noting that the SEC has misapplied the Howey Test, which determines whether an asset is a security. She believes Congress, not the SEC, should decide how digital assets are classified and regulated.

SEC’s Leadership Change Could Alter Its Stance?

The timing of Lummis’ intervention is significant, as the SEC is experiencing a leadership shift. With Mark Uyeda now serving as Acting Chair, there is speculation that the agency might take a more balanced approach.

Uyeda has already introduced a dedicated crypto task force to develop a clearer regulatory framework, signaling a potential change in direction.

Coinbase’s Fight Continues Amid Global Expansion

The SEC first sued Coinbase in 2023, accusing the company of operating as an unregistered broker, exchange, and clearinghouse. Coinbase has fought back, arguing that the agency’s rules were never designed for digital assets and that its enforcement actions are inconsistent.

Despite its legal battle in the U.S., Coinbase continues to expand globally. Recently Coinpedia news reported that the exchange secured a Virtual Asset Service Provider (VASP) license in Argentina, allowing it to legally operate and grow its presence in the region.

Under the leadership of Matías Alberti, Coinbase aims to build a stronger foothold in the Latin American crypto market.