The SEC’s “un-American” crackdown on crypto is driving innovation overseas, a U.S. senator warned, backing Coinbase in a pivotal legal battle over digital assets.
US Senator Calls SEC’s Crypto Approach ‘un-American’
U.S. Senator Cynthia Lummis of Wyoming is taking the fight for crypto regulation to the courts, formally backing crypto exchange Coinbase in its legal battle against the U.S. Securities and Exchange Commission (SEC). In an amicus brief filed on Jan. 24 with the U.S. Court of Appeals for the Second Circuit, Lummis challenged what she described as the SEC’s “failed legislation-by-enforcement strategy” under former Chair Gary Gensler and the Biden administration. She argued that the agency’s actions have created regulatory confusion and threaten to push digital asset innovation out of the United States.
Lummis specifically criticized the SEC’s handling of securities laws in relation to digital assets, stating that its enforcement-first approach lacks transparency and bypasses Congress’s role in creating clear regulations. The lawmaker stressed:
The SEC’s approach under the Biden administration was to aggressively reinterpret case law governing Howey and investment contracts, keep those interpretations secret, and then demand compliance from digital asset exchanges. Such an approach is un-American. It is the job of Congress to provide a legislative framework that clearly draws the line between a security and a commodity.
She warned that by relying on outdated legal definitions, the SEC is creating legal uncertainty that could drive crypto businesses and jobs overseas.
The senator’s intervention comes as Congress continues working on bipartisan efforts to establish a comprehensive regulatory framework for digital assets. Lummis, a strong advocate for the industry, has co-sponsored legislation aimed at distinguishing between digital commodities and securities. By supporting Coinbase’s appeal, she hopes to push back against what she sees as regulatory overreach and reaffirm that only Congress—not unelected regulators—has the authority to set digital asset policy. The case, now before the Second Circuit, could have far-reaching consequences for the future of cryptocurrency regulation in the United States.
A longtime pro-bitcoin advocate, Lummis has positioned herself as one of the most vocal supporters of cryptocurrency in Congress. This month, President Donald Trump nominated her to chair the newly formed Senate Banking Subcommittee on Digital Assets, a panel tasked with shaping U.S. policy on crypto and exploring the potential for a strategic bitcoin reserve. “Digital assets are the future, and if the United States wants to remain a global leader in financial innovation, Congress needs to urgently pass bipartisan legislation establishing a comprehensive legal framework for digital assets,” Lummis stated. Her leadership in this space signals an increasing focus on digital assets within the federal government as the industry continues to expand.
Source: Bitcoin
