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Crypto investment firm Paradigm has filed an amicus brief in the SEC’s case against exchange Bittrex, claiming the regulator is overstepping its jurisdiction. <\/p>\n
The case should be dismissed because the SEC<\/a> has “wrongfully” attempted to oversee crypto secondary markets, Paradigm said in the filing, adding that the practice represented an undue extension of the Howey test. <\/p>\n “The SEC lacks the authority to regulate secondary markets for crypto assets because they do not involve ‘investment contracts’ and are therefore not securities transactions under the agency’s remit,” Paradigm wrote in a blog<\/a> postmonday. <\/p>\n The SEC charged<\/a> Bittrex in April for allegedly operating an unregistered securities exchange, broker and clearing agency. Bittrex filed for bankruptcy about two weeks later. <\/p>\n The case marked the first of three the SEC has brought against crypto exchanges in recent weeks. Coinbase and Binance are also facing charges from the regulator. <\/p>\n \u201cThe SEC’s claims against Bittrex and the other crypto exchanges are fundamentally different from its many prior cases against token sellers,\u201d Paradigm’s special counsel Rodrigo Seira said in a Monday. tweet<\/a>, “In those prior cases, the SEC exercised its authority to regulate fundraising schemes under the Howey test.”<\/p>\n The filing marks the second time Paradigm has backed an exchange facing legal action from the SEC. In May, shortly after the securities regulator sued Coinbase, Paradigm filed an amicus brief claiming the agency had issued insufficient guidance for crypto firms. <\/p>\n \u201cUntil the SEC engages in the rulemaking Coinbase has requested, the digital-assets industry is stuck in limbo, simultaneously told to \u201ccome in and register\u201d yet having no effective means of doing so,\u201d Paradigm wrote in a May blog<\/a> on its Coinbase amicus brief. “That is not how administrative law is supposed to work.”<\/p>\n Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter<\/a> now.<\/strong><\/p>\n Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief<\/a>,<\/strong><\/p>\n Can’t wait? Get our news the fastest way possible. Join us on Telegram<\/a> and follow us on google news<\/a>,<\/strong><\/p>\n<\/div>\n
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