The Chief Legal Officer of Coinbase has claimed that the regulatory approach towards cryptocurrencies is broken. Paul Grewal has pointed out the new anti-crypto vendetta launched by SEC recently.
It is worth noting that SEC is currently trying a former employee of Coinbase in the matter of insider trading. On the other hand, SEC is also investigating nine cryptocurrencies listed on Coinbase as unregistered securities.
Talking on the matter, Grewal appeared on a recent podcast. During his interview, he claimed that it seems that the US regulators are operating out of desperation to revoke all types of cryptocurrency operations and trading.
He claimed that the regulators are not taking the legal approach to address the matter of crypto and cryptocurrency regulations.
Crypto Firms are Facing Regulatory Pressure
It is worth mentioning that Coinbase is not the only cryptocurrency enterprise that has been targeted by SEC. The Kraken exchange was fined for paying $30 million on account of getting its illegal staking process. Like other cryptocurrency exchanges, Coinbase took heed of this news and amended the terms and conditions of its staking service agreement.
Coinbase has joined Ripple Labs, another cryptocurrency entity that is dealing with the unregistered security lawsuit by SEC, as an amicus brief that has promoted more crypto entities to follow suit.
Following these changes, staking services for various cryptocurrencies such as Solana, Atom, ADA, and Tezos were revoked. However, Grewal maintained that such antagonism towards cryptocurrencies could drive blockchain-based businesses out of the country and move to other parts of the world.
He claimed that when major cryptocurrency entities move out of the US to other nations, the dynamics of the sector can change considerably.
Coinbase CLO also mentioned the collapse of FTX, marking it as a complete fraud. He maintained that the government regulators could take reference from this event and make sure that they don’t approve such projects in the future that can lead to future catastrophes. SEC has been investigating Coinbase for unregistered securities since last year.
In response, Coinbase has started a formal petition to the government authorities to call for regulatory clarity by SEC. This petition has raised several important questions that are related to the matter of proper cryptocurrency regulations.
Grewal claimed that there is still time to find a middle ground and resolve the matter with negotiation. He raised the concern that SEC also has to deal with pressure raising from the crypto community as a collective unit using subpoenas and other enforcement actions.