Coinbase is citing a recent U.S. Supreme Court judgment in its fight against charges of operating an unregistered securities venue, according to a Wednesday legal filing. The crypto exchange is arguing that the SEC is attempting to exert “extraordinary wholesale power” over the $1 trillion digital asset industry, which is a breach of powers of the kind judges recently ruled unlawful.
Coinbase is referring to the Supreme Court ruling on June 30, which found that the Secretary of Education had overstepped his authority by canceling around $430 billion in student debt. This ruling reinforced the legal doctrine that government agencies need clear support from Congress if taking a decision of major economic or political significance.
“Far from granting the ‘clear congressional authorization’ required for the SEC to exercise such authority, Congress has expressly recognized that it has not yet delegated such regulatory authority and is actively considering regulatory structures for the digital asset industry,” said Coinbase’s filing.
U.S. lawmakers are currently considering a range of digital asset laws, including a bipartisan bill by Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) which favors giving authority to the Commodity Futures Trading Commission (CFTC) rather than the SEC. The SEC has argued that digital assets constitute regulated securities, and that Coinbase knew it was violating the law by failing to register its activities.
Coinbase and its rivals Binance and Bittrex have all denied the charges, arguing the regulator has no jurisdiction. The parties meet later Thursday for a preliminary hearing in a New York courtroom in a trial that could potentially drag on for years.