Coinbase CLO Calls for SEC Reform After Trump’s Victory

Coinbase’s chief legal officer (CLO), Paul Grewal, called for reform of the United States Securities and Exchange Commission (SEC) following the victory of crypto-loving candidate Donald Trump on Wednesday.

In a statement on X, the Coinbase executive urged the agency to end its regulation-by-enforcement reign and adopt clear regulatory policies that promote dialogue and innovation.

“Stop suing crypto. Start talking to crypto. Initiate rulemaking now. There’s no reason to wait,” he said.

SEC’s Regulatory Approach

Under Gary Gensler’s leadership, the SEC has maintained a hostile stance and heavily cracked down on crypto firms, raising investor concerns. Reports show that the agency has collected over $4.68 billion this year alone from crypto firms through fines as part of its enforcement approach.

The SEC sued Coinbase in June 2023, alleging that the crypto exchange violated federal securities law by operating as an unregistered broker, exchange, and clearing agency since 2019. According to the agency, Coinbase’s product, which allowed investors to earn rewards on crypto assets, constituted an illegal securities sale.

In response, Coinbase criticized the SEC for its overreach and stated that it does not offer securities and is not within the SEC’s jurisdiction.

The case is still ongoing as both parties fight to secure victory.

Armstrong Urges SEC to Drop “Frivolous” Cases 

In a statement on X last month, Coinbase CEO Brian Armstrong called on the next SEC Chair to drop all “frivolous” cases on crypto firms and apologize to Americans. While he mentioned that the action would not undo the damage done to the country, he is confident it would restore trust in the SEC as an institution.

Trump vowed to fire Gensler on his first day in office to end the SEC’s “anti-crypto crusade.”

Robinhood Chief Legal Officer (CLO) Dan Gallagher is seen as the favorite to replace Gensler. The lawyer served as SEC’s Commissioner from 2011 to 2015 under Barack Obama’s administration. He also served as the deputy director and co-acting director of the Division of Trading and Markets.