Coinbase chief legal officer Paul Grewal raised concerns about the US Securities and Exchange Commission (SEC) completely denying crypto companies to seek advice for complying with the law. XRP lawyer John Deaton agreed with Grewal that the US SEC under Gary Gensler deters good conduct and uses crypto firms’ voluntary disclosures and details against them in enforcement actions.
US SEC Deters Crypto Compliance Efforts
Coinbase CLO Paul Grewal expressed concerns about why the US SEC denies advising crypto firms on complying with the law and sees it as proof of an intent to break the law.
“I’ve never understood the logic that seeking advice to comply with the law is proof of an intent to break the law. Sometimes, maybe most times, it’s actually the opposite.”
Pro-XRP lawyer John Deaton said, “Paul is on point here.” The SEC has maintained a negative view of crypto and deters good conduct. The SEC sees seeking advice on selling a token lawfully in the US as an intent to violate Section 5 of the Securities Act.
“If you are transparent and publicly disclose partnerships with others, along with token sales, the SEC uses it against you and argues that you are publicly demonstrating a common interest with all token holders that the SEC later conflates with being in a common enterprise with all token holders, said Deaton.”
Seeking cooperation and compliance with the SEC is almost impossible as the regulator uses it as evidence against crypto companies. Ripple, LBRY, Dragonchain, and Coinbase have the worst experience with the US SEC and lawyers recommend clients to not cooperate with the SEC.
He also added that Coinbase CEO Brian Armstrong didn’t get a meeting with Gensler and the SEC. On the other hand, Sam Bankman-Fried had two private meetings with Gensler. The SEC under Gensler now claims that the crypto exchange Coinbase approved for public listing two years ago is now illegal.
Also Read: Worldcoin Launches Feature To Allow Unverified Users Reserve WLD Tokens
Should Crypto Companies Remain Transparent?
Many crypto companies such as Coinbase and Ripple believe transparency improves trust among their customers. However, the recent stance of the SEC against the crypto industry has become a problem for crypto companies.
The SEC now looks to appeal against Judge Torres’ ruling that programmatic sales of XRP are not securities. The industry has criticized the move by the SEC.
Also Read: Bitwise Revises Bitcoin Futures ETF To Bitcoin And Ether Strategy ETF
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