• Coinbase’s Chief Legal Officer, Paul Grewal has voiced concerns over the US SEC’s refusal to provide guidance for crypto companies seeking to adhere to regulatory requirements.
• XRP advocate and lawyer John Deaton agrees with Grewal’s viewpoint that the SEC is discouraging ethical behavior and exploiting voluntary disclosures by crypto enterprises.
• The SEC interprets seeking advice on lawful token sales as a potential violation of the Securities Act’s Section 5, which could be interpreted as the agency playing favorites.
Coinbase’s Legal Chief Slams SEC
Coinbase’s Chief Legal Officer, Paul Grewal has voiced concern regarding the US Securities and Exchange Commission’s (SEC) refusal to guide cryptocurrency companies seeking to adhere to regulatory requirements. This stance has raised eyebrows within the crypto community and prompted XRP advocate and lawyer John Deaton to agree with Grewal’s viewpoint.
SEC Discourages Ethical Behavior?
Deaton criticized the SEC, led by Gary Gensler, for what he perceives as discouraging ethical behavior and exploiting voluntary disclosures by crypto enterprises to fuel enforcement actions against them. He argued that this approach deters good conduct from companies looking for legal advice on how they can operate lawfully in the U.S., which could be seen as an indication of playing favorites.
Grewal Questions Logic Behind Interpretation
Grewal expressed his bewilderment that seeking legal guidance to ensure compliance implies an intention to infringe upon the law; according to him, such consultations often serve as a preventive measure counteracting any notion of criminal intent.
Deaton Expands Upon Concerns
Deaton cited instances where transparent disclosure of partnerships and token sales were turned against companies by the SEC which then used this information to allege a shared interest among token holders; he believes this tactic allows the agency to insinuate that token sale participants have violated Section 5 of the Securities Act despite their efforts at transparency or advisement from legal experts.
Conclusion
The SEC’s interpretation of seeking advice on lawful token sales has been controversial due its potential implications for those involved in these transactions; both Grewal and Deaton have expressed their concerns over this stance taken by Gary Gensler’s agency which may be seen as enabling an environment where certain actors are favored over others in regards to regulatory compliance responsibilities