At a conference in Manhattan this morning, lawyers and journalists got a preview of the upcoming legal battle between the U.S. Securities and Exchange Commission (SEC) and Coinbase. The discussion ranged from legal formalities to matters of principle and theory, including the question of whether cryptocurrency should be allowed to exist in the United States. SEC Director of Enforcement Gurbir S. Grewal and Coinbase Chief Policy Officer Faryar Shirzad both weighed in on the matter.
Grewal argued that the SEC’s enforcement suit against Coinbase was the result of the exchange not responding to earlier warnings. He also explained why the SEC chose to pursue exchanges rather than individual token issuers. “I have fewer than 1,300 people” on staff, Grewal said. “Every year I have 700 recommendations we bring to the commission. We can’t be everywhere all at once… When we’re evaluating cases to bring, we have to make judgment calls.”
Shirzad suggested that the SEC’s approach may be counter to the agency’s own goal of investor protection. “To the extent it becomes part of public policy to push exchanges offshore, you’re pushing that nexus between policy and U.S. law out of the perimeter of U.S. law. That’s a big deal. This has to be a matter of national strategy,” he said.
The SEC and Coinbase appear to be talking past each other, with the SEC enforcing the law as written and Coinbase advocating for a future that hasn’t been written yet.