US Senator Cynthia Lummis has filed an amicus brief supporting Coinbase in its ongoing legal battle against the Securities and Exchange Commission (SEC), accusing the agency of exceeding its authority and undermining congressional oversight.
The Wyoming Republican, a long-time advocate for crypto, described the SEC’s enforcement-driven regulatory strategy as a violation of constitutional principles.
Amicus brief
In her filing with the US Court of Appeals for the Second Circuit, Lummis criticized the SEC’s approach under former Chair Gary Gensler, which she said involved reinterpreting securities laws without transparency or consultation.
According to Lummis
“The SEC’s tactics disregard the Constitution’s separation of powers and jeopardize the innovation and growth of digital assets.”
The SEC initiated a lawsuit against Coinbase in 2023, alleging the company operated as an unregistered broker, exchange, and clearinghouse. However, the exchange has contested these claims, asserting that the agency’s regulations are ill-suited for the unique characteristics of digital assets.
The case has emerged as a landmark moment in determining how cryptocurrencies are governed under US law. Lummis’ brief contends that the SEC has inconsistently applied the Howey Test, a legal framework for defining securities, creating regulatory uncertainty for businesses and consumers.
She emphasized that such interpretations are better left to Congress, which can craft laws that balance innovation with consumer protection.
Changing guard
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 create a more pragmatic regulatory framework.
This development has fueled optimism among crypto advocates that the agency may adopt a less adversarial stance. Lummis, who now leads the Senate Banking Committee’s digital assets panel, has long championed bipartisan efforts to clarify regulatory oversight for crypto.
She co-authored legislation with Senator Kirsten Gillibrand (D-N.Y.) proposing a clearer division of responsibilities between the SEC and the Commodity Futures Trading Commission (CFTC). The bill also aims to streamline compliance requirements for crypto platforms, providing much-needed clarity for the industry.
With the Coinbase case now before the Second Circuit, Lummis has urged the court to curb the SEC’s enforcement-led approach. She called on judges to reinforce the separation of powers by ensuring that regulatory decisions reflect legislative intent rather than agency overreach.
According to Lummis:
“The SEC cannot act as both lawmaker and enforcer.”
She further argued that the Coinbase case presents an opportunity to establish a more balanced framework for digital assets.
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