A group of six legal scholars specializing in securities law and related fields submitted an amicus brief in favor of crypto exchange Coinbase in its ongoing legal battle against the United States Securities and Exchange Commission (SEC).

An amicus brief is a document filed in court by a party not directly involved with the related case. It is generally used to add supporting arguments to one side of the lawsuit and emphasizes how the case will have a broader impact beyond the involved parties.

The group of legal scholars filed the amicus brief in the U.S. District Court for the Southern District of New York on Aug. 11.

Screenshot of the legal scholars’ amicus brief.  Source: Court Listener

It is worth highlighting that this noteworthy action followed Senator Cynthia Lummis’ own submission of a favorable amicus brief, which took place a day prior on August 11.

The following individuals, namely Stephen M. Bainbridge of UCLA, Tamar Frankel of Boston University, Sean J. Griffith hailing from Fordham Law School, Lawrence Hamermesh representing Widener University, M. Todd Henderson associated with the University of Chicago Law School and Jonathan R. Macey from Yale Law School, are the scholars who have collectively assumed the role of amici. Their collective effort has outlined an illustrative chronicle detailing the evolution and delineation of investment contracts, as manifested in the submitted filing.

Related: SEC punts on ARK 21Shares spot Bitcoin ETF, opens proposal to comments

In their filing, the legal practitioners contended that federal precedents, as encapsulated by the Howey test, acknowledge that “investment contracts” necessitate anticipation of business income, profits, or assets. In general, the esteemed law scholars advocated for the Court to steadfastly adhere to the established definition of the term ‘investment contract’ when interpreting its scope.

“An investor must be promised, by virtue of his or her investment, an ongoing contractual interest in the income, profits, or assets of the enterprise. In this section, we discuss some of these cases.”

Meanwhile, the group of legal scholars clarified that their affiliations with universities or law schools in no way bear any relevance to their involvement with the amicus brief.

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?