Coinbase Chief Legal Officer (CLO) employs “Bump Stock” firearm lawsuit against SEC, raising concerns about unjust tactics.
Story Highlights
Paul Grewal, the Chief Legal Officer (CLO) of Coinbase, is challenging a recent court ruling that classified certain crypto assets as securities.
Grewal criticizes the Securities and Exchange Commission (SEC) for obtaining default judgments, which he believes allows them to win cases without proper legal arguments.
The ruling and Grewal’s criticism raise concerns for the entire cryptocurrency industry.
Now that’s what I call a daring move!
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Paul Grewal, the Chief Legal Officer (CLO) of Coinbase, is challenging a recent ruling by a US court that favored the Securities and Exchange Commission (SEC). The ruling categorized certain crypto assets on secondary markets as securities, which has prompted Grewal to express his criticism. He draws a comparison to a recent Supreme Court case involving bump stock guns, highlighting inconsistencies in regulations and a lack of transparency.
The “guns” are out and they’re firing! Keep reading.
Breaking it Down: Grewal’s Comparison
Grewal breaks down a conversation between Justice Gorsuch and a government official from the bump stock gun case, emphasizing a sudden reinterpretation of a law from the 1930s. He questions the fairness and transparency in regulatory enforcement, particularly criticizing the SEC’s use of default judgments that hinder defendants from presenting their cases.
Just before the Supreme Court heard arguments last week in a case involving @coinbase on arbitration, it heard arguments in the “bump stock” gun case. There was an exchange between J. Gorsuch and the government that shed remarkable light on various other administrative law cases, including…
pic.twitter.com/6AHUYJLl2f
— paulgrewal.eth (@iampaulgrewal)
March 4, 2024
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SEC Utilizes Coinbase Insider Case to Strengthen Binance Lawsuit
Disapproval of SEC’s Actions
Grewal’s concerns extend to the SEC’s handling of the Binance Holdings case. The SEC accuses former Coinbase employee Ishan Wahi of insider trading, supported by a previous ruling from Judge Rakoff in the SEC’s case against Terraform Labs and Do Kwon. This ruling categorized tokens like LUNA and MIR as securities, reinforcing the SEC’s stance on the nature of crypto assets traded on platforms.
Despite Grewal’s strong defense, the SEC prevails with Judge Tana Lin’s default judgment, confirming certain crypto assets on secondary exchanges as securities. The SEC’s argument relies on the Howey test, asserting that these crypto assets were initially offered and sold as investment contracts.
Industry Disturbances
These legal developments cast a shadow over the cryptocurrency industry and Coinbase’s legal battles. Grewal’s vocal opposition adds depth to the ongoing discussion about regulatory oversight and enforcement.
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