Coinbase just wants the SEC to follow the rule of law

Companies • February 17, 2023, 7:14AM EST

UPDATED: March 28, 2023, 11:49PM EDT

Episode 12 of Season 5 of The Scoop was recorded remotely with The Block's Frank Chaparro and Coinbase Chief Legal Officer Paul Grewal.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher, or wherever you listen to podcasts. Feedback and revision requests can be sent to [email protected].

There are crypto projects that are securities, but you won’t find them on Coinbase, Chief Legal Officer Paul Grewal said.

U.S. regulators have been cracking down on digital assets. Gewal says Coinbase is just looking for consistency.

“We’re not saying we don’t want to be regulated. We’re just saying that regulation all ought to occur under the rule of law that is in a manner that’s consistent with what Congress wrote,” he added.

One particular inconsistency Grewal points out is how the Securities and Exchange Commission’s request for crypto exchanges to register as national securities exchanges clashes with Coinbase's explicit policy of not listing securities:

“For there to be no distinction drawn between the products that are securities and the products that aren’t, is effectively saying that we would have to agree that the rule of law doesn’t matter and that even though Congress limited the SEC’s jurisdiction to securities and securities alone, we should come in and register anyway,” Grewal said.

During this episode, Chaparro and Grewal also discuss:

How Coinbase's staking product differs from Kraken's
Why it's in the U.S. government's interest to protect stablecoins
What it means to receive a Wells notice

This episode is brought to you by our sponsors Circle, Railgun, Flare Network

About Circle
Circle is a global financial technology company helping money move at internet speed. Our mission is to raise global economic prosperity through the frictionless exchange of value. Visit Circle.com/Scoop to learn more.

About Railgun
Railgun is a private DeFi solution on Ethereum, BSC, Arbitrum and Polygon. Shield any ERC-20 token and any NFT into a Private Balance and let Railgun’s zero-knowledge cryptography encrypt your address, balance and transaction history. You can also bring privacy to your project with Railgun SDK, and be sure to check out Railgun with partner project Railway Wallet, also available on iOS and Android. Visit Railgun.org to find out more.

About Flare
Flare is an EVM-based Layer 1 blockchain designed to allow developers to build applications that can use data from other blockchains and the internet. By providing decentralized access to a wide variety of high-integrity data from other blockchains and the internet, Flare enables new use cases and monetization models. Build better and connect everything at Flare.Network.

About Authors

Davis Quinton is the Director of Podcasts at The Block and runs our flagship podcast called The Scoop, hosted by Frank Chaparro. Since joining The Block as an 'intern' in early 2022, he has worked closely with leaders across departments to translate The Block's written content into engaging multimedia formats. He holds a degree in Social Research & Public Policy from New York University in Abu Dhabi and is based in Sydney, Australia.

Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].