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Coinbase’s chief legal officer has publicly urged U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler to stop misleading the market regarding crypto tokens being securities. His request followed Gensler’s repeated assertions that numerous crypto tokens conform to the legal definition of securities, thereby requiring compliance with SEC regulations.
Coinbase’s chief legal officer, Paul Grewal, addressed U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler on social media platform X on Monday, asking him to cease misrepresenting crypto tokens as securities.
This plea followed Gensler’s remarks which highlighted: “Many of those tokens are securities under the law of the land, as interpreted by the US Supreme Court. We follow that law.” In response, Grewal stated:
Please stop misleading the market — tokens are NOT securities. Their pleadings notwithstanding , your own attorneys have admitted this in court.
Gensler emphasized on Monday that while crypto represents a small portion of the overall financial market, it disproportionately contributes to scams and fraud due to noncompliance with securities laws. The SEC chief also stressed the need for proper disclosures in the crypto space, particularly concerning tokens classified as securities. He believes that investors are not receiving adequate disclosures.
Grewal has consistently criticized the SEC and Gensler for their aggressive regulatory approach towards the crypto sector. Following the SEC issuing a Wells notice to Robinhood Markets concerning its crypto business, the Coinbase legal chief wrote on X:
The SEC’s litigation campaign is clear as mud — and only ramps up pressure on Congress to act. That’s why we’ve supported Fairshake’s effort to elect pro-crypto candidates who understand the need for clear rules of the road. We encourage others to do the same.
The securities watchdog has initiated lawsuits against multiple crypto firms, including Coinbase, alleging that a number of tokens available on their platforms are securities. Gensler has repeatedly indicated that most crypto tokens, except bitcoin, meet the securities criteria. A recent legal filing disclosed the SEC’s investigation into whether ether (ETH) might also be classified as a security.
