Read on Twitter
1/ I've been getting a lot of questions about how FinCEN's proposed regulation should be challenged in court if it were to be finalized as written. Who will sue? How can folks help? Here are my thoughts.
2/ Coinbase has signaled its intention to challenge the rule in court, which makes sense since it's the largest company in the space. https://twitter.com/brian_armstrong/status/1346354549175554048
3/ Separately, the Blockchain Association has hired Paul Clement, former United States Solicitor General and probably the best possible litigator for such a challenge, to lead a suit if necessary. https://twitter.com/BlockchainAssn/status/1340061599030251522
4/ These suits will be primarily on APA procedural grounds, although potentially also challenge FinCEN's authority to issue this rule. We think such a challenge has a high probability of success because the rulemaking process has been tragically flawed.
5/ That said, if a procedural challenge is not successful, Coin Center will file suit on constitutional grounds. As we note in our comment letter, this rule would violate our and your First and Fourth Amendment rights. https://www.coincenter.org/join-us-in-responding-to-an-unfair-and-discriminatory-midnight-rulemaking/
6/ So what can folks do? First, industry should speak with one voice and rally behind a single legal challenge. I believe that should be the Blockchain Association's for several reasons.
7/ For one thing, they already have the top litigators preparing for it. You can see a preview of what such a suit would look like here: https://theblockchainassociation.org/wp-content/uploads/2020/12/Blockchain-Association-Letter-re-Comment-Period.pdf
8/ Second, the BA's lawsuit is already funded. Over a year ago, the BA took over a crypto legal defense fund of over $2 million created by industry for just this eventuality. https://theblockchainassociation.org/the-blockchain-association-takes-over-the-defend-crypto-fund-to-advance-favorable-ecosystem-wide-jurisprudence
9/ So, that's what the industry can do. As far as the community goes, please support Coin Center. With any luck, if this rule becomes final, it will be struck down for procedural deficiencies. But if we have to sue, we will need a war chest. Onward. https://www.coincenter.org/donate/
