Coinbase CLO Flags Inconsistencies In US SEC’s Securities Claim

Paul Grewal, the Chief Legal Officer at Coinbase has spotted some inconsistencies in crucial legal claims of the United States Securities and Exchange Commission (SEC). The basis for his opinion was the Lejilex lawsuit controversy that had the regulator file a reply brief.

Coinbase Support For Lejilex in SEC Lawsuit

In the Lejilex case, the SEC argued “whether a digital-asset transaction is a securities transaction is not determined by the nature of the asset.” However, Grewal pinpointed that the Commission argued the precise opposite to Judge Failla in its case.

He claimed the SEC is obviously telling one judge one thing and telling the other something else.

The Coinbase executive does not think this level of inconsistency should be tolerated from US authorities. The American cryptocurrency exchange has been backing Lejilex for the past few months against the SEC. In July, it showed it support to the firm by filing Amicus Brief challenging the U.S SEC’s overreach. Coinbase’s argument has always been for the SEC to provide clarity on the regulation for the crypto industry.

Grewal once stated that Coinbase will do everything within its jurisdiction to get regulatory certainty for the millions of Americans who own cryptocurrencies. The firm has done this in many ways including appealing the denial of rulemaking petition from the US SEC.

Furthermore, he highlighted that regulation by enforcement is bad for consumers, restricts innovation and hurts the US economy.

SEC Lawsuits With Ripple

On Coinbase lawsuit with the SEC, there has been an unexpected pause on the request of the Commission. For context, the government agency requested that the court grant an extension of time to complete discovery. It asked for a four-month extension, pushing the deadline from October 18 to February 18 next year.

While they wait, Coinbase filed a motion to compel the U.S. Commodity Futures Trading Commission (CFTC) to produce communications with issuers of 12 tokens named in a related lawsuit brought by the SEC. This motion is to help it in an ongoing lawsuit in the Southern District of New York (SDNY).

Blockchain payment firm Ripple Labs is also a victim of the consistent crypto crackdown from the SEC. Its case with the regulator has been ongoing for over three years. The US SEC recently filed for a Notice of Appeal in the ongoing case in response to a verdict on XRP’s securities status.

Several pro-XRP lawyers think the regulator does not stand chance this time as well.