SEC Accused of ‘Gaslighting’ Crypto Projects by Coinbase’s Chief Legal Officer: Implications for the Coin Market (COIN)

• Coinbase’s Chief Legal Officer, Paul Grewal, accuses the U.S. Securities and Exchange Commission (SEC) of “gaslighting” the US courts and the crypto sector.
• Grewal points to the SEC’s case against Utah-based Digital Licensing Inc., operating under the name “DEBT Box”, as an example of the regulator’s inconsistent practices.
• He argues that the SEC did not follow its own Wells process when it refused to clarify which crypto assets would be charged as securities.

Paul Grewal, Coinbase’s Chief Legal Officer, criticizes the SEC for its inconsistent practices in dealing with crypto assets, accusing the regulator of “gaslighting” the US courts and the crypto industry.

SEC Accused of “Gaslighting”

Paul Grewal, Coinbase’s Chief Legal Officer, has accused the U.S. Securities and Exchange Commission (SEC) of “gaslighting” the US courts and the crypto sector. He calls attention to the SEC’s case against Digital Licensing Inc., a Utah-based company that was doing business under the name “DEBT Box”.

SEC’s Inconsistent Practices

In a brief to avoid dismissal of its case against Debt Box with prejudice, the SEC admitted that it did not follow its own typical Wells process when it refused to tell Coinbase what assets would be charged as securities. Grewal argues that Coinbase’s Wells notice didn’t include an explanation of what crypto assets were linked to securities transactions. He questions why the government did not follow its ‘typical’ process in their case and what that implies about its claims.

SEC’s Actions Against Other Crypto Exchanges

The SEC sent a Wells notice to Robinhood’s crypto trading arm earlier this month and Uniswap Labs in April. The regulator has also launched lawsuits against Binance and Kraken, accusing both exchanges of violating securities laws.

Conclusion

As the SEC continues to take action against crypto exchanges, the regulator’s practices are being called into question. With Coinbase’s Chief Legal Officer accusing the SEC of “gaslighting”, it remains to be seen how the regulator will respond and what this means for the future of crypto regulation.