Coinbase CLO Slams US SEC For Contradictions In Opposition To Appeal Request

Coinbase Chief Legal Officer (CLO) Paul Grewal has once again called out the United States Securities and Exchange Commission (SEC). This time, the legal veteran is concerned about the inconsistency in the regulator’s tone in its recent filing opposing its request for an Interlocutory Appeal.

Coinbase CLO: We Need to Maintain Honest Conversations

Recall that Coinbase filed a request for an interlocutory appeal in April after a Judge denied its Motion to Dismiss (MTD) request. The Gary Gensler-led Commission has filed its opposition to the appeal demand from the trading platform.

The regulator maintained that the Court should prevent Coinbase from filing the appeal. Coinbase’s stance for filing the appeal hinges on the differences in Opinion in a 1946 U.S Supreme Court case the regulator typically quotes. The major contention in the regulator’s filing against Coinbase is that majority of its supported assets are investment contracts.

This classification hinges on the provisions of the Howey Test, a keenly contested yardstick by crypto innovators. In his post on X, the Coinbase CLO said the Commission could not help contradicting its own help contradicting its own arguments. Grewal spotted different arguments in the same kind of appeal in the Ripple Labs lawsuit.

Today @SECGov filed its response to our request to file an interlocutory appeal with the 2nd Cir. The Commission couldn't help contradicting its own arguments for the same kind of appeal in Ripple. Here's just example–compare what they said before to what they say now. 1/3 pic.twitter.com/LkbXefV07N

— paulgrewal.eth (@iampaulgrewal) May 10, 2024

The Coinbase CLO is known to always call out the regulator. This time around, he specifically noted that the regulator contradicted itself as it relates to the need for appellate review. Grewal reiterated that in order to make headway, there need to be honesty between the regulator and the exchange’s team.

“Let’s at least have an honest conversation. Forget about a split across agencies, circuits and elsewhere. There’s not even a consensus about Howey and digital assets among the district judges in the same courthouse at Foley Square,” the Coinbase CLO said in his post on X.

Compounding Coinbase and SEC Loggerhead

Besides the securities lawsuit, the US SEC and Coinbase has other unsettled legal battles to sort. The exchange has sued the Commission for not providing regulatory clarity upon demands by industry stakeholders.

While neither party is willing to back down, it remains to be seen how the current securities lawsuit will pan out. The SEC is now known for its unending enforcement actions and recently, it sent a Wells Notice to Robinhood. The charges from the regulator remains the same, sending a concern to crypto stakeholders on when there will be regulatory clarity to guide their activities.

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