• Coinbase’s Chief Legal Officer, Paul Grewal, has voiced concerns regarding the US Securities and Exchange Commission (SEC) refusal to guide cryptocurrency companies seeking to adhere to regulatory requirements.
• Pro-XRP lawyer John Deaton echoed Grewal’s sentiments, emphasizing that Gary Gensler’s SEC has exhibited an unfavorable bias against the crypto sector, discouraging responsible conduct.
• The SEC’s interpretation of seeking advice on lawful token sales has been controversial, as it interprets this action as a potential violation of the Securities Act’s Section 5.
Coinbase’s Legal Chief Slams SEC
Coinbase’s Chief Legal Officer, Paul Grewal, has voiced concerns regarding the US Securities and Exchange Commission (SEC) refusal to guide cryptocurrency companies seeking to adhere to regulatory requirements. This stance has raised eyebrows within the crypto community and prompted XRP advocate and lawyer John Deaton to agree with Grewal’s viewpoint.
SEC’s Unfavorable Bias Against Crypto Sector
Deaton criticized the SEC led by Gary Gensler for what he perceives as discouraging ethical behavior and exploiting voluntary disclosures by crypto enterprises to fuel enforcement actions against them. He emphasized that current approach by the SEC deters good conduct and argued that asking a lawyer how one can sell a token lawfully in the U.S. is twisted and used by SEC as an intent to violate Section 5 of the Securities Act.
Grewal Expresses Disbelief
Grewal expressed his bewilderment that seeking legal guidance to ensure compliance implies an intention to infringe upon the law. In his view, such consultations often serve as a preventive measure countering any notion of criminal intent.
Deaton Cites Instances Where Transparent Disclosure is Used Against Companies
According to Deaton, this tactic has allowed the SEC to insinuate that there was a shared interest among token holders which then leads them into trouble with their tokens sales or partnerships being turned against them in court cases or other proceedings.
The lack of guidance from SEC has become more prominent over time leaving many industry players in confusion about regulations they need comply with when doing business in cryptocurrency space while also raising debates about its impact on innovation in general.