Coinbase General Counsel on SEC Crypto Approach: “Is This the Best We Can Do?”

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Coinbase Chief Legal Officer Paul Grewal has launched another scathing attack on the United States Securities and Exchange Commission.

Speaking on the Decrypt gm podcast, Grewal said he shared the concern “that we’re losing the script a bit here in the US when it comes to crypto and crypto regulation.”

In February, the SEC fined Kraken, another popular U.S. crypto exchange, $30 million for allegedly violating securities laws.

Coinbase responded to the news by updating the terms and conditions of its staking service, prompting US-based customers to withdraw several popular cryptocurrencies, including Solana (SOL), Cosmos (ATOM), Cardano (ADA ) and Tezos (XTZ).

There are broader concerns that the SEC’s tough stance on digital asset regulation will eventually see US crypto firms move overseas, with Grewal agreeing that “in other parts of the world, even in other jurisdictions that we consider friends and allies, there’s a very different kind of conversation that’s happening.

“I think you should ask: is this the best we can do?” said Grewal. “Is this really a smart way to regulate crypto, to put not just exchanges like Coinbase, but issuers and project developers across the country and around the world, to the task of pulling threads from the speeches by one or more commissioners, looking for media interviews that one or more commissioners or other SEC officials have given that suggest all assets are securities?

“A Broken Process,” Says Coinbase Executive

Grewal said it was “a pretty broken process”, something “we could all agree on at least as much”. But it doesn’t have to be that way.

He cited FTX’s collapse last year, which he described as “nothing short of outright fraud,” conceding that events like this should provide enough reason for regulators to s ‘worry before agreeing’ on the right way to ensure that tragedies like this never happen again.

“At the same time, I think it’s also important that we don’t allow this unfortunate event to shape the way we think about the future as countries like France and many others take a very different approach to the regulations,” Grewal said.

Last year, the SEC also reportedly launched an investigation into Coinbase for allowing US residents to trade unregistered securities, with the crypto exchange submitting a formal petition for rulemaking regarding asset securities regulation. digital.

The petition included dozens of specific questions and issues that Coinbase believes need to be addressed for the proper regulation of the crypto space.

“It’s not too late yet, the train hasn’t completely left the station,” Grewal said.

Yet he fears “that the response to this proactive engagement – ​​not just from Coinbase, but a number of other crypto players – has been to double or triple subpoenas and enforcement actions” .

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