Coinbase’s Chief Legal Officer, Paul Grewal, has taken a stand against the prohibition of SEC employees from holding or using cryptocurrencies. In a letter to the US Office of Government Ethics (OGE), Grewal emphasized the importance of SEC staff understanding and using crypto technology before making regulatory recommendations. He called the ban on SEC employees holding crypto “particularly egregious” and stated that potential conflicts could be easily managed.
Grewal highlighted the need for SEC staff to use crypto technology, especially as President Trump had signed an executive order earlier in the year to establish regulatory clarity for digital financial technology. The order mandated a Working Group, which included SEC staff, to submit a report with crypto regulatory proposals within 180 days.
In a separate letter to the newly sworn-in SEC Chair, Paul Atkins, Grewal urged for the immediate correction of the ban on SEC employees holding crypto. He emphasized that the ban was hindering the Task Force’s ability to make accurate regulatory recommendations. Grewal also pressed for the rescinding and updating of Legal Advisory 22-04, which restricts SEC employees from holding crypto.
Grewal pointed out that most crypto activities are not securities, and the Commission should continuously adapt and build expertise in the rapidly evolving crypto space. He also mentioned recent SEC reversals on crypto enforcement actions, indicating that engaging with crypto technology does not inherently pose conflicts or concerns.
Overall, Grewal’s efforts to lift the ban on SEC employees holding crypto aim to ensure that regulatory recommendations in the crypto space are well-informed and reflective of the technology’s complexities. By advocating for a more inclusive approach to crypto regulation, Grewal is paving the way for a more progressive and adaptive regulatory framework.