Paul Grewal, Chief Legal Officer at Coinbase, said in an interview that Coinbase is willing to fight the US Securities and Exchange Commission (SEC) in the US Supreme Court, Bloomberg reports. He said,
"If it takes going to the Supreme Court, that's what we're prepared to do. I think that every court that looks at this issue is going to conclude the SEC has fundamentally gotten this wrong."
On Tuesday, the SEC sued Coinbase for securities law violations. Previously, Coinbase sought a mandamus action from the Third Circuit, requesting the SEC to reply to Coinbase's petition for formal rulemaking in the digital assets sector filed last year. Paul Grewal said on Twitter that the court had noted the SEC's suit against Coinbase, and had asked the SEC whether that meant the SEC had decided to deny the petition.
He said, "we continue to believe that rules of the road, from legislation or rulemaking or both, must come before enforcement actions. That is why we petitioned the SEC for rulemaking nearly a year ago in the first place. If the SEC's answer to our petition for rulemaking is 'no', then they are required by law to tell us, because we have the legal right to question that 'no' in court. And there are serious questions to be asked."
Regarding the SEC complaint, Coinbase CEO Brian Armstrong pointed out on Twitter that:
- The SEC reviewed Coinbase's business and allowed it to become a public company in 2021;
- Coinbase has repeatedly tried to register but there is no path. Coinbase doesn't list securities, and rejects the vast majority of assets it reviews;
- The SEC and CFTC have made conflicting statements, and don't agree on "what is a security and what is a commodity";
- The US congress is introducing new legislation to fix the situation, and the rest of the world is moving to put clear rules in place to support crypto.
"Instead of publishing a clear rule book, the SEC has taken a regulation by enforcement approach that is harming America. So if we need to avail ourselves of the courts to get clarity, so be it. Btw, in case it's not obvious, the Coinbase suit is very different from others out there – the complaint filed against us is exclusively focused on what is or is not a security. And we are confident in our facts and the law." He said.
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Policy and Regulation