Coinbase is embroiled in two separate cases with the Securities and Exchange Commission, but you wouldn’t know it by the calm demeanor of the company’s chief legal officer.
The SEC issued a Wells Notice to the company in March, warning that it could potentially sue Coinbase, which then filed a lawsuit against the agency to try to force it to take a stand on whether it would set clear rules for the crypto industry. In June, the SEC followed through on its notice, suing Coinbase for allegedly operating as an unregistered securities exchange, broker, and clearing agency. The company has rejected this claim.
Yet, none of this appeared to bother Paul Grewal—not just Coinbase’s chief legal officer but a former federal judge—who told Blockchain Association CEO Kristin Smith at Messari’s Mainnet conference on Wednesday that he was optimistic about both cases. In particular, he noted that the lawsuit Coinbase filed against the SEC has the chance to make a lasting impact on the industry.
“We’re optimistic that that’s also going to help shape the landscape and bring clarity for all of us that I think we all desperately need,” he said.
Grewal said Coinbase was encouraged that in the SEC’s case against the company the court agreed that whether the agency has jurisdiction over the crypto industry is relevant—and should be weighed accordingly. He also said the case exemplified the agency’s attitude toward the entire industry.
“The case against Coinbase is really a case against digital assets and crypto more generally,” Grewal said.
Additionally, Grewal noted that several court decisions in crypto-related cases, including those against Grayscale and Ripple, have yielded positive results already.
“You’re seeing judges, in courts all over this country, express a certain healthy skepticism—if I can put it that way—about the SEC’s approach to regulating this industry, about their legal theories, and frankly about the record that they have either assembled or failed to assemble in order to substantiate their claims to authority over this entire industry,” Grewal added.
Still, the SEC’s cases against Grayscale and Ripple aren’t finished. The agency has already said it plans to appeal the July decision in favor of Ripple, and the Grayscale ruling, which dealt with the firm’s rejected application to create a spot Bitcoin ETF, doesn’t force the SEC to accept Grayscale’s application but merely to review it again.
The SEC has until the first week of October to review and respond to Coinbase’s most recent motion in the case. Once Coinbase has a chance to respond again, the presiding judge will decide whether a full jury trial is required.