• Coinbase and SEC executives engaged in a Manhattan-based discussion among lawyers and journalists to discuss crypto presence in the US.
  • SEC’s Grewal justifies the agency’s new strategy by blaming Coinbase for disregarding earlier warnings to increase compliance.  
  • Coinbase’s Shirzad challenged that the SEC’s current approach contravened its own goal to protect investors.
  • While the SEC focuses on interpreting and implementing current laws, Coinbase wants fresh legislation to support contemporary/evolving blockchain.

Coinbase exchange and the US Securities and Exchange Commission (SEC) executives met in a Manhattan gathering attended by lawyers and journalists to discuss the place of cryptocurrencies in the United States.

The event, organized by Rutgers School of Law and the law firm Lowenstein Sandler, saw Faryar Shirzad and Gurbir S. Grewal of the two respective organizations phase off perspectives on “why or whether cryptocurrency should be allowed to exist in the United States at all.”

Also Read: BlackRock joins hand with Coinbase Custody for Bitcoin ETF application, undeterred by SEC vs Coinbase lawsuit

Coinbase vs. SEC on the place of crypto in the US

Coinbase exchange representative offered a rebuttal after SEC Director of Enforcement Gurbir S. Grewal explained his rationale for the agency’s legal suit against the US-based exchange. Grewal described the enforcement suit as the logical climax of a long chain of clear signals that the SEC had sent to the industry since 2017.

According to Grewal, the agency’s change of tactic comes after crypto entities failed to increase compliance over time despite the SEC’s growing effort. Specifically, he says Coinbase disregarded previously repeated warnings to work incrementally toward compliance. The change of tact was a judgment call based on capacity limitations that the agency would henceforth pursue exchanges as opposed to individual enforcement actions against violating token users

I have less than 1,300 people. Every year I have 700 recommendations we bring to the commission. We can’t be everywhere all at once … When we’re evaluating cases to bring, we have to make judgment calls.

Regarding decentralized exchange (DEX) regulation, Grewal says that the SEC will no longer admit “decentralization” as an excuse as known individual entrepreneurs are at the center of the projects. Notably, this assertion echoes sentiments by the agency’s chair Gary Gensler earlier when he took office.

Sending a warning to YouTubers, Grewal said that the SEC was keen on crypto influencers on social media trying to take advantage of the innocent public. Specifically, the agency was on the lookout for those exploiting minority groups where people are excluded from traditional fiancé with the promise of financial inclusion.

That’s offensive to me … I find that conduct to be some of the most egregious conduct we’ve dealt with.

Coinbase official claps back

Coinbase was represented by Chief Policy Officer Faryar Shirzad, who boasts a professional history with Goldman Sachs as head of government affairs during the George W. Bush administration.

Hedging his speculation that the SEC was stepping on an ongoing legislative process, Shirzad said that basing crypto on existing law would be detrimental to the country’s competitiveness and innovation as the industry has actively struggled to show that existing law does not work for many blockchain-based digital assets.

According to Shirzad, the SEC’s approach threatens other industries beyond crypto because, with blockchain as the internet’s value layer, projects like JPMorgan, which is also blockchain-based, would be affected.

Further, the Coinbase CPO said the agency was shooting itself in the foot as its current approach contravened its goal to protect investors. In Shirzad’s words:

…To the extent it becomes part of public policy to push exchanges offshore, you’re pushing that nexus between policy and US law out of the perimeter of US law. That’s a big deal. This has to be a matter of national strategy.

Fighting on different battlegrounds

The confrontations indicate two parties on completely different wavelengths, such that while the SEC is more focused on how the law is written and interpreted, Coinbase wants the industry to enjoy a future that is not limited by any past or existing laws. New ones should be forged.

Also Read: Coinbase CLO challenges SEC’s congressional action on DEXes registration

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

TRON price rallies to yearly high following burn of over $12.6 million tokens

TRON price rallies to yearly high following burn of over $12.6 million tokens

TRON fee revenue reached an all-time high of $1.758 million on February 20. TRON network burned over 12.62 million tokens on Tuesday, likely catalyzing the altcoin’s gains. TRON price hit a 2024 peak of $0.14048 on Wednesday and the altcoin is likely to rally higher. 

More TRON News

Ethereum price briefly touches $3,000 for third time in a week

Ethereum price briefly touches $3,000 for third time in a week

Ethereum price crossed $3,000 for the third time this week, resulting in euphoria among crypto market participants. On-chain intelligence firm Santiment noted that traders bought Ethereum at the local top, above $3,000, out of the Fear Of Missing Out (FOMO).

More Ethereum News

XRP price suffers pullback with latest update in SEC v. Ripple lawsuit

XRP price suffers pullback with latest update in SEC v. Ripple lawsuit

XRP price dropped below $0.55 on Thursday as both Ripple and SEC work on remedy-related briefs. March 13 is the next key deadline for the SEC v. Ripple lawsuit. The court will determine penalties for Ripple’s institutional sales of XRP by the April 29 deadline. 

More Ripple News

Polygon inflation ends, MATIC price primed for explosive growth?

Polygon inflation ends, MATIC price primed for explosive growth?

Polygon’s Foundation contract shelled out the last remaining 273 million MATIC tokens on Wednesday, marking the end of the vesting period. This development means that there are no more tokens to unlock i.,e all of the MATIC tokens ever minted are now in circulation.

More Polygon News

Bitcoin: BTC eyes $60,000 but correction looms

Bitcoin: BTC eyes $60,000 but correction looms

BTC has been moving up only since January 22 but could slip into a consolidation before the next leg up. With the rate at which BTC is climbing after the ETF approval, coupled with strong fundamentals, investors should consider buying the dips before BTC hits $60,000.

Read full analysis