In a dramatic uptick in their ongoing legal dispute, the Chief Legal Officer (CLO) of Coinbase has publicly accused the United States Securities and Exchange Commission (SEC) of persistent stonewalling and impeding their efforts. Grewal made these comments as the San Fransisco-based cryptocurrency exchange pushes back against what it sees as the SEC’s unclear regulations and overreach in the rapidly growing crypto space.
Coinbase Demands Key Documents From The SEC Chairman
In a series of posts on the X (formerly Twitter) platform, Coinbase CLO Paul Grewal alleged that the SEC has continuously adopted an aggressive enforcement strategy without providing a practical framework for compliance, in favor of refusing to provide clear regulatory guidelines.
The Coinbase CLO has revealed further details regarding the company’s ongoing legal battle with the SEC. A significant obstacle still exists, even though some concerns like the Chevron deference and secondary sales of Binance‘s BNB token have been made clear.
Grewal claimed that the SEC was acting in a way that would impede the disclosure of key information that would help Coinbase establish its case against the Commission. “And now, late on a Friday, more stonewalling from SECGov to stop Coinbase from obtaining documents from Gary Gensler in our litigation,” he stated.
Drawing attention to May 2021, Grewal highlighted that after Gary Gensler was sworn in as the chairman of the SEC, Gensler confirmed market participants’ long-held belief that transactions involving digital assets traded on exchanges were exempt from securities rules when he testified before Congress, stating that the agency lacked regulatory power over such exchanges.
He further underlined several other different statements on this subject from the regulatory watchdog’s chairman to audiences of market participants as well as the general public.
Thus far, due to the relevance of those interactions in demonstrating how the SEC’s enforcement action violates the due process clause of the Constitution, Coinbase has requested that Gensler provide records pertaining to those communications. However, Grewal noted that the agency and its chairman are trying to keep these interactions hidden from them and the general public.
Broader Frustration In Cryptocurrency Landscape
Paul Grawal‘s allegations shed light on the crypto community’s general dissatisfaction with what many see as hostile and unpredictable regulation. This comes after several months of court disputes between the SEC and Coinbase.
Lately, Coinbase has consistently demonstrated its efforts to engage with the SEC to seek clarity and address regulatory concerns. On Thursday last week, the crypto exchange sued the SEC demanding crucial documents from the agency that could help with its ongoing litigation. However, the Commission has yet to respond to the motion.
The main point of contention in the dispute is the SEC’s claims that the crypto exchange has been acting as an illegal securities exchange and providing investors with unlicensed securities. In the larger conflict over the proper regulation of cryptocurrencies and digital assets in the US, this legal discourse could be a major turning point, as the result might establish significant precedents for crypto regulations.
