Paul Grewal, Chief Legal Officer at Coinbase, questioned the due process followed by the United States Securities and Exchange Commission (SEC) against crypto companies.
The lawyer accused the SEC of “gaslighting” practices, coinciding with US Judge Robert Shelby’s assessment.
Coinbase’s Legal Challenge to SEC
Grewal invited Ripple, Uniswap, Kraken, Binance.US, and Robinhood to ask the SEC for a “thorough explanation” in their respective Wells Process.
He cited the DEBT Box case, where the SEC “failed to notify” which digital assets would qualify as securities. At the time, US District Judge Robert Shelby sanctioned the SEC for misconduct in the lawsuit. Therefore, it demonstrated SEC Chairman Gary Gensler‘s failure to comply with due process.
Grewal believes that with these actions, the SEC violates its own principles. As it failed to explain the charges to DEBT Box, now Coinbase finds itself in a similar situation. The lawyer emphasized the compnay did not receive a brief on what securities transactions the firm carried out.
“We received no “thorough explanation” of the evidence of what assets supposedly gave rise to securities transactions. We weren’t told what assets were at issue at all. Why would the government not follow its “typical” process in our case, and what does that say about its claims?,” Grewal questioned.
Likewise, Stuart Alderoty, Chief Legal Officer at Ripple, eloquently said that defendants in Kafka’s “The Trial” were treated better than Rupple.
The analogy emphasizes the belief that Ripple was subjected to a harsh and unjust process by the SEC. Therefore, akin to the fictional and oppressive legal ordeal faced by Josef K. in Kafka’s “The Trial.” It highlights concerns about fairness, transparency, and due process in regulatory enforcement actions.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
These events reflect the growing concerns within the crypto industry about fairness and regulatory consistency in the SEC’s actions.
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