Executives at Cryptocurrency Exchange Coinbase Opened up to the Public About their Company's Regulatory Woes on April 27, With Chief Legal Office Paul G G REWAL SPEAKING At Consensus 2023 and APPEaring AlongSide Ceo Brian Armstrong in a Youtube Clip Posted in the Video.
The appeal is in response to the company's receipt of Wells' notice that the SEC may intend to take enforcement action against it. "Coinbase's core commitment to regulatory compliance has never wavered," Grewal said in the video, which is aimed at the chairman and Commissioner of the SEC. Around the same time the video emerged, Grewal was speaking to the audience at the Consensus 2023 conference in Austin, saying: "We're actually sitting on the table looking for regulation, looking for rules, looking for a framework that makes sense for our particular technology so we can register."
In the video, Grewal argued that Coinbase's business has not changed in the two years since it was approved to list on the Nasdaq stock exchange. At the time, Grewal said, “The SEC's position appears to be that the SEC lacks the statutory authority to regulate a business like Coinbase.”
Grewal attributed the SEC's new view to FTX. He quoted SEC Chairman Gary Gensler as saying: “I feel like we have enough authority in this space, I really do.” Grewal added that FTX is “completely different” from Coinbase. Coinbase is already regulated, Grewal said, adding that it has a "BitLicense" in New York state that prohibits it from listing securities.
“We believe that if the SEC wants to expand its insight of our industry, it needs legislation or rulemaking,” Grewal said. The SEC asked Coinbase last summer to develop a proposal that would require crypto companies to register when they want to list securities. The SEC halted discussions before responding to Coinbase's proposal and several weeks before issuing the “broad but largely vague” Wells notice on March 22, which generally warns of imminent SEC enforcement action. "We still don't know exactly what we did that worried the SEC," Grewal said. Armstrong talked about his decision to start the company and its early days. He also said:
"We are committed to working within the regulatory envelope."
The company has no listed securities, he said. He added that the company thoroughly vets its products and rejects "approximately 90%" of the assets it reviews. Armstrong also reiterated that Coinbase is prepared to defend its position in court. However, "it doesn't have to get to that point. We welcome a real conversation about a viable path forward for our industry."
