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Highlights
- Coinbase CLO expressed heavy criticism for the SEC's handling of the DEBT Box case.
- He noted that the regulatory agency lacks accountability and transparency.
- This sentiment was earlier put forth by Republican senators, who penned a letter to the SEC Chair Gary Gensler.
Coinbase’s Chief Legal Officer (CLO), Paul Grewal, has joined a chorus of voices criticizing the U.S. Securities and Exchange Commission (SEC) over its handling of the recent DEBT Box case. Grewal’s condemnation comes in the aftermath of the SEC’s admission that it misrepresented evidence, leading to a freeze on DEBT Box’s assets.
Coinbase CLO Slams SEC For DEBT Box Legal Drama
Grewal did not mince words in his criticism of the SEC, highlighting the agency’s silence in the face of its admitted deception. In a recent thread on X, the Coinbase CLO noted that they knew the TRO against DEBT Box was “tainted by SEC’s misinterpretations.” Grewal further remarked, “But rather than immediately pulling its order after admitting that it deceived the Court, the SEC sat silently.” Thus, pointing to a lack of accountability within the regulatory body.
Moreover, Coinbase decided to defy the SEC’s order to freeze assets related to DEBT Box. Grewal added, “So rather than continue this injustice, we then told the SEC we wouldn’t comply further unless they explained why we should.” According to the Coinbase CLO’s statement, the crypto exchange corrected the wrong by unfreezing the assets while the SEC remained silent.
“Dismissal without prejudice, and an hour or two of training, is hardly a sufficient remedy here,” Grewal asserted, highlighting the inadequacy of the SEC’s response to the fiasco. In the wake of mounting pressure, the SEC announced broader corrective actions to prevent similar incidents in the future.
The controversy erupted when the SEC’s lawyers misstated information in court and subsequently failed to correct themselves, resulting in false accusations against Digital Licensing Inc., also known as DEBT Box. Furthermore, the SEC’s missteps were met with a strong rebuke from U.S. District Judge Robert Shelby, who chastised the regulatory body for its actions.
Also Read: Exclusive: Coinbase Full-year Results Likely to Disappoint the Market
U.S. Senators Cast Doubt On The SEC
A group of Republican senators, including J.D. Vance and Cynthia Lummis, put forth similar concerns, which the Coinbase CLO echoed. These U.S. senators penned a letter to SEC Chair Gary Gensler, expressing deep-seated concerns about the commission’s enforcement practices. The senators underscored the gravity of the situation, stating, “It is unconscionable that any federal agency could operate in such an unethical and unprofessional manner.”
The heart of the matter lies in the SEC’s mishandling of evidence, which led to the freezing of DEBT Box’s assets at Coinbase. Despite the SEC’s subsequent move to dismiss the case, Grewal remained skeptical of the agency’s actions, emphasizing the need for greater accountability and transparency in regulatory proceedings.
Also Read: Ripple CLO Speculates SEC Lawyers Whistleblowing Against Gary Gensler Amid Exodus
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