Chamber of Digital Commerce alleges SEC is suing the equivalent of a “grocery store selling oranges”

The United States-based Chamber of Digital Commerce has joined a collective effort to challenge the lawsuit between the SEC and Binance.

In an amicus brief dated Oct. 19, the advocacy group aims to halt the SEC’s attempt to oversee the cryptocurrency industry without authorization from the U.S. Congress.

Tokens are not a security

The Chamber of Digital Commerce has since appealed to the court that the lawsuit between Binance and the SEC should be dismissed, as the legal entity has exceeded its jurisdiction, and digital assets not constituting investment contracts do not meet the criteria for Exchange Act registration requirements.

“The SEC is suing the equivalent of a grocery store selling oranges and other fruit or an online ecommerce marketplace, like Amazon,” the brief states. “Tokens alone are not securities, and the markets they are available to buy and sell are not securities exchanges.”

The organization concludes that tokens available for trading on exchanges are not considered securities by the SEC, as they do not represent a contract or transaction that grants holders profit rights. Instead, blockchain networks use tokens for various purposes, such as conducting transactions, recording ownership changes, exchanging data, and facilitating coordination across organizations and the internet. These tokens are not typically associated with profit expectations.

Exceeding its jurisdiction 

This comes shortly after a Sept. 21 filing with the United States District Court for the District of Columbia, where both Binance Holdings and its CEO, Changpeng Zhao, contended that the SEC had exceeded its jurisdiction in the lawsuit brought against them. 

The 60-page petition asserted that the SEC had not provided clear industry guidelines before initiating legal action against the crypto exchange, which led to imposing retrospective regulatory authority on the cryptocurrency sector.