Coinbase’s Chief Legal Officer, Paul Grewal, has criticized the Securities and Exchange Commission (SEC) for allegedly misleading the courts and the crypto sector.
SEC’s Lack of Transparency
Grewal pointed to the SEC’s case against Digital Licensing Inc., a company that operated as “DEBT Box.” He noted that the SEC admitted in court documents that it did not follow its typical “Wells process” when refusing to disclose which assets it considered securities.
The Wells process is a warning issued by the SEC before pursuing legal action. Coinbase received one in March 2023, but Grewal claims it did not specify which crypto assets were linked to securities transactions.
Wells Notices to Crypto Firms
The SEC has also sent Wells notices to Robinhood’s crypto trading arm and Uniswap Labs. It has also filed lawsuits against Binance and Kraken, accusing them of violating securities laws.
Grewal’s Concerns
Grewal expressed concern about the SEC’s inconsistent application of its processes. He questioned why the agency did not follow its typical procedures in Coinbase’s case and what it implied about the SEC’s claims.
He argued that the SEC’s actions amounted to “gaslighting,” a term used to describe the manipulation of someone’s perception of reality. Grewal believes the SEC’s practices should not be tolerated.
