Paul Grewal expressed confidence in Coinbase’s legal standing, saying the platform has never sold securities as alleged by the US Securities and Exchange Commission (SEC). In early June, the SEC filed a lawsuit against Coinbase, saying the exchange was selling unregistered securities while the platform itself was not registered as a broker.
Gruel argues that the SEC has no authority over cryptocurrency exchanges. Plus, the regulator didn’t raise the registration issue when Coinbase became a publicly traded cryptocurrency company in April 2021. He called current financial laws outdated and ambiguous for cryptocurrencies. According to Gruel, many of the laws now applicable to the crypto space were written long before the Internet existed. Therefore, Coinbase’s goal is not just to win the lawsuit, but to gain regulatory clarity, the lawyer emphasized.
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“In terms of litigation with the SEC, I want to be very clear about that. We think we can win. We expect to win,” Coinbase’s legal counsel said.
Gruel noted that U.S. regulators’ statements on cryptocurrencies are contradictory. For example, SEC Chairman Gary Gensler believes that ETH should be considered a security after the Etherium merger, while U.S. Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam is convinced that ether is a commodity. Therefore, the outcome of this case could set a precedent for subsequent regulatory action against cryptocurrency exchanges and change the regulation of the industry.
Coinbase CEO Brian Armstrong recently revealed that the SEC had asked that all crypto assets other than bitcoin be removed from the site.