Coinbase Chief Slams SEC’s Lack of Crypto Guidance: Innovation at Risk

Von | 13. August 2023

• Coinbase’s Chief Legal Officer Paul Grewal has voiced concerns about the US SEC’s reluctance to provide crypto firms with guidance.
• XRP advocate and lawyer John Deaton agrees with Grewal’s view, criticizing the SEC for its unfavorable stance towards the industry.
• The SEC’s interpretation of seeking advice on lawful token sales has been controversial, as it may imply criminal intent.

Coinbase’s Criticism of SEC

Coinbase’s Chief Legal Officer, Paul Grewal, has voiced concerns regarding the US Securities and Exchange Commission’s (SEC) refusal to guide cryptocurrency companies seeking to adhere to regulatory requirements. Grewal expressed his bewilderment that seeking legal guidance to ensure compliance implies an intention to infringe upon the law.

Deaton Challenges SEC’s Crypto Stance

XRP advocate and lawyer John Deaton agreed with Grewal’s viewpoint and criticized the SEC, led by Gary Gensler, for what he perceives as discouraging ethical behavior and exploiting voluntary disclosures by crypto enterprises to fuel enforcement actions against them.

SEC Interpretation of Seeking Advice

The SEC’s interpretation of seeking advice on lawful token sales has been controversial, as it interprets this action as a potential violation of the Securities Act’s Section 5. Pro-XRP lawyer John Deaton echoed Grewal’s sentiments, emphasizing that Gensler’s SEC has exhibited an unfavorable bias against the crypto sector, discouraging responsible conduct.

SEC Playing Favorites?

Deaton cited examples where transparent disclosure of partnerships and token sales were turned against companies by the SEC, which then used this information to allege a shared interest among token holders. According to Deaton, this tactic had allowed the SEC to insinuate that those who sought out legal advice were attempting to commit criminal activities.

Conclusion

The US Securities and Exchange Commission’s reluctance in providing guidance for crypto companies raises debates within the community over its impact on innovation struggles for access have unveiled an ever-changing landscape within the industry. Companies are now wary when consulting lawyers due to fear of being misinterpreted by regulators who might use their own words against them in future enforcement cases.