Six esteemed legal scholars well-versed in securities law and related domains have submitted an amicus brief to the U.S. District Court for the Southern District of New York. The scholars’ collective aim is to champion the necessity of adhering to the established definition of an “investment contract” within the context of the ongoing legal clash between Coinbase and the US SEC.

Amicus Briefs and the Scholars’ Stand

Amicus briefs are documents presented in court by third-party entities not directly embroiled in the case. They serve as compelling instruments for lending additional support to one side of the litigation. Furthermore, these documents emphasize the broader repercussions of the case that stretch beyond the immediate parties involved.

In this instance, the amicus brief underscores the overarching significance of defining investment contracts within the crypto and securities landscape.

The group of esteemed legal scholars, hailing from prestigious institutions such as the University of California, Los Angeles, Boston University School of Law, Fordham University School of Law, Widener University Delaware Law School, University of Chicago Law School, and Yale Law School, filed the amicus brief.

Alongside this notable filing, Senator Cynthia Lummis also expressed her support for the cryptocurrency exchange.

A screenshot from the amicus brief

Defining Investment Contracts: A Matter of Federal Precedents and Interpretation

Central to the scholars’ contention is the concept that federal precedents, as well as the well-known Howey test, underscore the importance of anticipating business income, profits, or assets within investment contracts.

In a bid to fortify Coinbase position, the group fervently urges the court to steadfastly adhere to the established legal definition of an “investment contract,” thereby ensuring a comprehensive interpretation of its scope. The scholars further elaborate:

“The essence of an investment contract necessitates a commitment that stems from the investment itself, ensuring an ongoing and contractual stake in the enterprise’s income, profits, or assets. Herein, we delve into select cases that illuminate this crucial aspect.”

Academic Affiliations: A Non-Issue in Amicus Brief Involvement

The scholars also underscore that their affiliations with esteemed academic institutions and law schools are entirely irrelevant to their participation in the amicus brief.

Their involvement stands as a testament to their deep-seated commitment to promoting a thorough and precise interpretation of investment contracts, thereby contributing to the shaping of legal precedents in the evolving landscape of cryptocurrencies and securities.

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