During a House Agriculture Committee hearing, Paul Grewal, the chief legal officer at Coinbase, shed light on the dismissal of the crypto exchange by the US Securities and Exchange Commission (SEC). Despite months of discussions regarding Coinbase’s registration with the agency, Grewal revealed that the SEC provided no response or counter-proposal. This revelation came shortly after the SEC charged Coinbase for failing to register with them.
The SEC’s legal action against Coinbase followed their assessment that the platform operated as an exchange, broker, or clearing agency without proper registration. This development was outlined in a press release issued by the regulatory body. Adding to Coinbase’s challenges, a multi-state task force consisting of Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin targeted the exchange for alleged securities law violations. The task force claimed that Coinbase’s staking rewards program must be appropriately registered in Alabama.
Expressing their commitment to safeguarding consumers and investors, the Director of the Alabama Securities Commission, Amanda Senn, emphasized the importance of extending legal protections to those investing in decentralized finance. Senn stated that this action aimed to ensure that individuals engaging in crypto asset products receive equal legal protection and are fully aware of the associated risks.
Coinbase CEO Brian Armstrong took to Twitter to address the charges brought against the company by the SEC. Armstrong criticized the agency’s “regulation by enforcement approach,” which he believes is detrimental to the United States. Asserting Coinbase’s willingness to seek clarity through legal means, Armstrong said they would turn to the courts if necessary.
In summary, Coinbase’s chief legal officer highlighted the SEC’s dismissive response after months of registration discussions, while the SEC and state regulators took legal action against the exchange. Coinbase’s CEO expressed dissatisfaction with the SEC’s approach and affirmed their readiness to seek clarity through legal channels.
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