Coinbase’s Chief Legal Officer thinks the US Securities and Exchange Commission (SEC) is “gaslighting” the US courts and the crypto sector.
Coinbase CLO Paul Grewal demands attention to the SEC’s case against Digital Licensing Inc., a Utah-based company doing business as “DEBT Box.”
“In a letter seeking to avoid dismissal of the case against Debt Box with prejudice, the SEC included a notable admission that it did not follow its own typical Wells process when it refused to tell us which assets would be accounted for as securities stated: ‘The Wells process is intended to support the charging decision for a specific potential defendant. The SEC staff typically provides a thorough explanation of the evidence it would use to prove potential charges against a particular person or entity.’”
A Wells notice is a warning from the SEC indicating that the regulator plans to take legal action against a company. Coinbase received one in March 2023, a few months before the regulator launched a lawsuit against the exchange for allegedly violating securities laws.
Grow argues that Coinbase’s Wells notice did not include an explanation of which crypto assets were linked to securities transactions.
“We were not told at all which assets were at stake. Why wouldn’t the government follow the ‘typical’ process in our case, and what does that say about its claims?”
The SEC sent notices from Wells to Robinhood’s crypto trading arm earlier this month and to Uniswap Labs in April. The regulator has also filed lawsuits against Binance and Kraken, accusing both exchanges of violating securities laws.
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