Coinbase Strikes Back: Says Congress, Not SEC, Should Control Crypto
Coinbase's top lawyer, Paul Grewal, challenges the SEC's rule over digital money, stating that Congress should be in charge.
Paul Grewal, the top legal officer at Coinbase, recently stated that the U.S. Securities and Exchange Commission (SEC) is wrongly interpreting the law related to "investment contracts". He suggests that Congress, not the SEC, should control digital money like Bitcoin.
Grewal believes that the SEC's claim to control all digital money, except Bitcoin, is too extreme and doesn't make sense. He thinks that the SEC should not interfere in the business between companies and customers.
He also pointed out that Congress is not just thinking about creating rules for digital money, but is actively working on it. This could be about a new law that might be discussed when the House Financial Services Committee meets again after the July 4 holiday.
Grewal mentioned the Major Questions Doctrine, a ruling from the Supreme Court in June 2022 that restricts the power of federal agencies like the SEC. The doctrine says that big decisions with huge political and economic effects should not be made by agencies but by Congress.
In April, Coinbase referred to this doctrine in its response to the SEC. They claimed that the SEC should not have the sole power to make big decisions about digital money, such as what counts as a token. They believe such a decision would greatly increase the SEC's control over the U.S. economy.
Lawyer Bill Morgan then turned the discussion towards Coinbase's decision to stop trading XRP, a type of digital money. Morgan asked why Coinbase allows other coins to be traded but not XRP. He accused Grewal and Coinbase of not clearly explaining their decision.
