In a dramatic escalation of their ongoing legal dispute, the Chief Legal Officer (CLO) of Coinbase publicly accused the U.S. Securities and Exchange Commission (SEC) of constantly obstructing and hindering their efforts. Grewal made the comments as the San Francisco-based cryptocurrency exchange pushes back against what it sees as unclear and excessive SEC regulations in the growing crypto space.
Coinbase demands key documents from SEC chairman
In a series of posts On X Platform (formerly Twitter), Coinbase CLO Paul Grewal alleged that the SEC has consistently adopted an aggressive enforcement strategy without providing a practical compliance framework, in favor of refusing to provide clear regulatory guidance.
Coinbase CLO has revealed more details about the company’s ongoing legal battle with the SEC. A significant hurdle remains, though some concerns like deference to Chevron and secondary sales of BinanceBNB tokens have been clarified.
Grewal claimed that the SEC was acting in a way that would prevent the disclosure of key information that would help Coinbase build its case against the Commission. “And now, late on a Friday, the SEC governor is obstructing even more to prevent Coinbase from obtaining documents from Gary Gensler in our litigation,” he said.
Drawing attention to May 2021, Grewal pointed out that after Gary Gensler was sworn in as SEC Chairman, Gensler confirmed market participants’ long-held belief that transactions involving digital assets traded in exchange were exempt from securities rules during his testimony before Congress, stating that the agency had no regulatory authority over such exchanges.
He also highlighted several other different statements on this topic from the chairman of the regulatory watchdog to the audiences of market participants as well as the general public.
So far, because of the relevance of these interactions to demonstrating how the SEC’s enforcement actions violate the Constitution’s due process clause, Coinbase has asked Gensler to provide records of these communications. However, Grewal noted that the agency and its chairman have tried to keep these interactions hidden from them and the general public.
A broader frustration in the cryptocurrency landscape
Paul GrawalCoinbase’s allegations highlight the crypto community’s general discontent with what many see as hostile and unpredictable regulation. This comes after several months of legal disputes between the SEC and Coinbase.
Coinbase has been consistently demonstrating its efforts to work with the SEC to seek clarity and address regulatory concerns lately. On Thursday last week, the crypto exchange sued The SEC has demanded crucial documents from the agency that could help it in its ongoing litigation. However, the Commission has not yet responded to the request.
The main point of contention in the litigation concerns the SEC’s allegations that the cryptocurrency exchange acted as an illegal securities exchange and provided investors with unlicensed securities. In the broader conflict over the proper regulation of cryptocurrencies and digital assets In the United States, this legal discourse could be a major turning point, as its outcome could set an important precedent for crypto regulation.
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