Coinbase’s legal chief disputes SEC Chairman Gensler’s claim that most cryptocurrencies are securities.
Paul Grewal, Coinbase’s chief legal officer, urged U.S. SEC Chairman Gary Gensler in a social media post on May 7 to stop misleading the market about the legal status of cryptocurrencies.
Grewal made the statement in response to Gensler’s recent CNBC interview with Andrew Sorkin, in which he argued that numerous digital assets fall into the category of securities under existing law.
But Grewal countered that the SEC chairman’s claim was false because the watchdog’s lawyers had previously acknowledged that cryptocurrencies do not fall within the definition of securities.
In his message to Gensler, Grewal stated clearly:
“Stop misleading the market. Tokens are not securities. Despite their claims, your attorney acknowledged this in court.”
Inappropriate cryptocurrency disclosure
Meanwhile, Gensler reiterated his known position in a CNBC interview that most cryptocurrencies are security tokens, adding that this class of assets often lacks the required disclosures.
According to the SEC Chairman:
“Without prejudice to any of them, many of those tokens are securities under the law of the land as interpreted by the U.S. Supreme Court. So we follow that law, and you as investors are not getting the disclosures that are required or needed for those assets.”
Gensler did not specify which cryptocurrencies it considers securities, but recent regulatory actions suggest that all major tokens except Bitcoin are under scrutiny.
Since taking over as SEC Chairman, Gensler has made it a priority to bring cryptocurrencies within the commission’s regulatory scope, citing the Howey test as the benchmark for determining the status of securities.
Critics decried Gensler’s executive-focused approach and instead advocated for legislative clarity in Congress. However, due to the sluggish progress of cryptocurrency-related legislation, uncertainty in the industry is prolonged.
Several cryptocurrency companies, including Binance, Coinbase and Ripple, are entangled in a legal battle with the Gensler-led commission. Additionally, over the past month, the financial watchdog has issued Wells notices to other major cryptocurrency companies such as Uniswap, Consensys and digital trading platform Robinhood.
Coinbase’s legal chief disputed SEC Chairman Gensler’s claim that most crypto tokens are securities. First appeared on CryptoSlate.
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