Last week, oral arguments in the case filed by the Securities Exchange Commission against Coinbase demonstrated an underappreciated strength of the cryptocurrency community: our collective legal expertise. While questioning the parties, Judge Katherine Failla of the Southern District of New York mentioned several amici curiae—“friends of the court”—who submitted filings in support of Coinbase and noted their helpfulness in fleshing out key issues. The growing number of cases involving cryptocurrency and our opportunity to weigh in on important legal issues begs the question: Why don’t we as an industry do even more to proactively engage the judicial branch of our government?
Amicus briefs are one way to do so. An amicus brief is a legal filing by third parties, not directly involved in litigation, that assists the court by raising policy issues or providing additional context for a particular argument. Amicus briefs are commonly filed in major Supreme Court cases. According to this study by the law firm Arnold & Porter, more than 900 amicus briefs were filed during the 2019–2020 Supreme Court term, and justices cited them in 65% of cases. However, while amicus briefs are common at the highest level, many cases pass through trial courts and federal appellate courts without them.
But cases involving cryptocurrency have not followed this norm: In the case against Ripple, the industry filed 14 amicus briefs; in Coinbase, six; and in Grayscale, eight entities worked together to file amicus briefs. Failla’s on-the-record citations of the amicus briefs filed in support of Coinbase’s motion was a remarkable moment that highlighted how much these briefs can make a difference: A judge in a federal trial court-level case repeatedly cited to cryptocurrency industry briefs while discussing the merits of the SEC’s case and the technology at issue.
Some crypto companies, of course, have chosen to take more aggressive legal postures—namely Ripple, Coinbase, and Grayscale, which have been in full-blown litigation with the SEC. Others are reluctant to go this far. Understandably so: It’s expensive to wage legal battles, and litigation can drag on for years. And even if industry participants feel that battles are worth waging, they rightfully worry that putting themselves out there will land them in regulators’ crosshairs.
For those who have such concerns but still want their voices to be heard or to lend their expertise, the best solution remains the amicus brief. And if you don’t want to write one or hire counsel to do so yourself, support those who will represent your interests in their briefs. Organizations like CoinCenter, Blockchain Association, Crypto Council for Innovation, and influential venture capital firms like Andreessen Horowitz and Paradigm routinely file amicus briefs. Support can come in the form of financial resources, but can also include donating expert analysis and knowledge of key technical issues.
And if amicus briefs aren’t your thing, you can support industry defendants directly. For example, many smaller entities or individuals face lawsuits from powerful regulators and cannot afford a robust legal defense. We all benefit when those defendants are represented by good lawyers who will accurately describe the technology at issue. Individual legal battles, even at the district court level, can be very important.
While it’s possible that one case in one district court can be limited to its facts and not technically set a precedent for courts outside that district, the reality is that a bad legal outcome in one case may be cited by government regulators or out-of-district judges. This sort of outcome can impact our entire industry. Some groups are already working to support industry defendants directly; for example, the Investor Choice Advocates Network is starting to take pro bono clients in SEC actions. I am sure they could use more resources to do so.
While we wait for Congress to legislate, we should take advantage of every opportunity to educate courts about technology and weigh in on the most important legal questions facing our industry. One of the crypto ecosystem’s greatest strengths is being able to marshal an indirectly connected but ideologically aligned group toward collective global action.
The crypto industry’s recent momentum has been driven by thousands of conversations around the core tenets of our legal rights. Proactively engaging with the courts through amicus briefs or providing resources to defendants is something the industry should do much more of in 2024. Lobbying and marketing are valuable, but being a friend of the court might be more so.
Amanda Tuminelli is chief legal officer at the DeFi Education Fund, where she leads the organization’s impact litigation and policy efforts. The opinions expressed in Coins2Day.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Coins2Day .
