US Senator Cynthia Lummis Supports Coinbase in Legal Battle Against SEC
US Senator Cynthia Lummis has filed an amicus brief in support of Coinbase in its legal battle against the Securities and Exchange Commission (SEC). She accuses the SEC of overstepping its authority and undermining congressional oversight.
Challenging the SEC
Lummis, a Wyoming Republican and a vocal supporter of crypto, criticized the SEC’s enforcement-focused regulatory strategy, calling it a violation of constitutional principles. She specifically called out former Chair Gary Gensler’s approach, which she believes involved reinterpreting securities laws without transparency or consultation.
“The SEC’s tactics disregard the Constitution’s separation of powers and jeopardize the innovation and growth of digital assets.”
Legal Battle
The SEC filed a lawsuit against Coinbase in 2023, alleging that the company operated as an unregistered broker, exchange, and clearinghouse. Coinbase has refuted these claims, stating that the agency’s regulations do not align with the unique characteristics of digital assets.
Lummis’ amicus brief argues that the SEC’s inconsistent application of the Howey Test, a legal framework for defining securities, has created regulatory uncertainty for businesses and consumers. She believes that such interpretations should be the responsibility of Congress, which can create laws that balance innovation with consumer protection.
Leadership Changes at the SEC
The filing comes as the SEC undergoes leadership changes under the Trump administration, with Acting Chair Mark Uyeda signaling a shift in priorities. Uyeda recently announced the formation of a crypto task force to develop a more practical regulatory framework.
This move has sparked hope among crypto advocates that the SEC may take a less adversarial stance. Lummis, who now heads the Senate Banking Committee’s digital assets panel, has been a proponent of bipartisan efforts to clarify regulatory oversight for crypto.
Legislation Proposal
Lummis co-authored a bill with Senator Kirsten Gillibrand (D-N.Y.) that proposes a clearer division of responsibilities between the SEC and the Commodity Futures Trading Commission (CFTC). The legislation aims to streamline compliance requirements for crypto platforms, offering much-needed clarity for the industry.
With the Coinbase case now before the Second Circuit, Lummis is urging the court to rein in the SEC’s enforcement-led approach and ensure that regulatory decisions align with legislative intent rather than agency overreach.
“The SEC cannot act as both lawmaker and enforcer.”
Lummis believes that the Coinbase case presents an opportunity to establish a more balanced framework for digital assets.