Paradigm Throws Down Gauntlet, Supports Coinbase Against SEC's 'Insincerity'

Venture capital firm Paradigm filed an amicus brief in support of Coinbase Global Inc.'s COIN ongoing lawsuit against the U.S. Securities and Exchange Commission (SEC).

The lawsuit aims to compel the SEC to respond to Coinbase's rulemaking petition, which seeks practical guidance for the cryptocurrency industry.

Paradigm stated SEC Chair Gary Gensler's repeated call for cryptocurrency projects to register is an "insincere admonition" that is impossible to comply with.

In the amicus brief, Paradigm argued the SEC has a legal obligation to provide explicit rules and regulations for the cryptocurrency industry, allowing individuals and companies to conform their conduct accordingly.

"By refusing to do so, the agency effectively paralyzes a major and growing industry," it added.

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Paradigm criticized the SEC for regulating through press releases, social media posts and selective enforcement actions, rather than engaging in meaningful rulemaking.

Cryptocurrency exchange Coinbase submitted a petition to the SEC last year, requesting the agency to propose and adopt rules specifically tailored to the regulation of securities offered and traded via digital platforms.

The petition outlined the need for a comprehensive regulatory framework to address the unique challenges of the cryptocurrency industry.

"As Coinbase’s petition demonstrates, century-old securities laws do not provide an obvious fit for digital assets and their exchanges. If the SEC wants companies to “come in and register,” Paradigm stated.

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