Paradigm has filed an amicus brief in the SEC’s lawsuit against crypto exchange Bittrex.
The crypto investment firm challenged the securities regulator’s jurisdiction over crypto secondary markets.
Paradigm highlighted previous statements by SEC Chair Gensler about the agency’s lack of authority over secondary markets.
San Francisco-based Paradigm has filed an amicus brief in the Securities and Exchange Commission’s lawsuit against Seattle-based crypto exchange Bittrex. The crypto investment firm’s amicus filing comes almost three months after the securities regulator sued the crypto exchange for allegedly operating an unregistered securities exchange, broker, and clearing agency in the United States.
SEC v Bittrex : An Attempt To Expand Regulator’s Jurisdiction?
Rodrigo Sierra Silva, Special Counsel for Paradigm, took to Twitter recently to share the news of the crypto investment firm’s amicus brief in SEC v Bittrex. Silva, who previously served as outside counsel to crypto investors and entrepreneurs at Cooley LLP, stated that his company’s filing was to show the rejection of the SEC’s “unsupported attempt” to expand its jurisdiction over crypto secondary markets.
The SEC’s lawsuit against Bittrex is the first of three cases that the SEC has brought in rapid succession against crypto exchanges. Through these actions, the SEC is wrongfully attempting to lay claim over crypto secondary markets.”
Rodrigo Silva, Special Counsel for Paradigm
The Paradigm lawyer also cited a Congressional testimony by SEC Chair Gary Gensler, wherein he acknowledged the lack of his agency’s authority to regulate the secondary markets in question. “The exchanges trading in these crypto-assets do not have a regulatory framework,” Gensler stated during his testimony before the House Financial Services Committee on May 6, 2021.
Silva added that the law hadn’t changed since the SEC Chair’s 2021 testimony and called out the securities regulator for somehow discovering the same authority that it previously acknowledged it did not have. Paradigm believes that the regulator doesn’t have jurisdiction over secondary markets for crypto assets because they do not involve investment contracts and are, therefore, not securities transactions under the agency’s remit.