Morrison Cohen Files Amicus Curiae Brief in Support of Coinbase’s Third Circuit Petition for Review of the SEC’s Denial of Rulemaking

On March 18, 2024, Morrison Cohen filed an amicus curiae brief in the United States Court of Appeals for the Third Circuit on behalf of client LEJILEX in support of Coinbase, Inc.’s petition for review of the SEC’s denial of rulemaking.

LEJILEX is a Texas corporation that is developing a new digital asset trading platform. Morrison Cohen’s amicus brief states that a company like LEJILEX that “wishes to do business in the digital asset space in a legal, legitimate manner,” needs clear “rules of the road” on “basic questions of securities law, such as when the SEC believes digital assets are securities within its regulatory authority, versus when those assets are simply things, no more under the SEC’s purview than (say) oranges.”

The amicus states that LEJILEX, which cannot launch its exchange without fear of being investigated or sued by the SEC, is a prime example of an American company in limbo because of the SEC’s lack of rulemaking.

Indeed, in February, LEJILEX and another entity initiated their own action against the SEC in the United States District Court for the Northern District of Texas, seeking declaratory and injunctive relief to ensure that the company does not have to register with the SEC as a securities exchange, broker, or clearing agency, as the SEC has insisted in multiple enforcement actions against comparable digital asset trading platforms, such as Coinbase. Thus, LEJILEX shares the same concerns as Coinbase, and cannot operate in the face of regulatory uncertainty.

Jason Gottlieb and Michael Mix filed the amicus brief, linked below.