Paradigm, a venture capital firm helmed by Coinbase co-founder Fred Ehrsam, has filed a document to support the crypto exchange in its battle against the U.S. Securities and Exchange Commission. Coinbase had previously petitioned the regulator to propose and adopt rules that would govern the regulation of digital assets classified as securities.

Backing Coinbase's request, Paradigm argued that the SEC has a legal obligation to provide the crypto industry with clear rules that are subject to judicial review. The firm noted in its post that by refusing to do so, the agency effectively remains "a major and growing industry" in a state of paralysis.

Amicus brief filed by Paradigm mentioned Chair Gensler’s position that crypto projects and digital asset exchanges must simply "come in and register". The firm labelled the suggestion of the Chair as an "insincere admonition", as it is impossible to comply without proper guidance from the regulatory body.

Paradigm, which backs numerous budding entrepreneurs regarding digital assets, has expressed its strong interest in ensuring that the SEC be held to account for its delay in responding to Coinbase's rulemaking petition. The resulting period of uncertainty has caused a "de facto ban" on digital asset trading platforms, affecting the firm's interests.

In its statement, the firm claimed against the SEC for flouting "bedrock principles" to provide companies fair warning for over a decade. Instead of clear regulations, the SEC was observed to lean more towards regulation through press releases, 'office hour' videos posted on Twitter, enforcement actions and vocal warnings.

The discussion surrounding crypto regulations has gathered momentum in recent times, with lawmakers in the U.S. starting to show some signs of understanding the urgency of the situation. A joint committee hearing in the U.S. House of Representatives showcased growing consensus about the need for new rules. On the same line, Paradigm favourably argued against the SEC's practices that incur delay in responding to rule making petitions.



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