Coinbase tells SEC that DEXs can't be regulated as exchanges

Quick Take

  • Coinbase has sent the U.S. Securities and Exchange Commission a fresh letter, arguing that it’s impossible to regulate DEXs like a central exchange. 

Crypto exchange Coinbase, which has been embroiled in a lengthy public spat with the U.S. Securities and Exchange Commission, sent a fresh letter to the regulator on Monday, this time arguing against a proposal to regulate decentralized exchanges like their centralized counterparts.

Chief Legal Officer of Coinbase Paul Grewel said Tuesday that it would be impossible for a DEX, as the decentralized exchanges like Uniswap are called, to register in the same way as a national securities exchange. 

"This proposal is too flawed on process & substance to move forward," he wrote in a thread on Twitter. "In particular, the SEC is attempting to front run Congressional action by baking unsupported assumptions about its crypto jurisdiction into the proposed rules."

Coinbase argues SEC can't ban industry

In the 8-page letter, Grewel argued an agency’s authority to regulate a particular industry "does not include the authority to ban that industry, absent clear Congressional authorization."

"Truly decentralized systems do in fact exist and have no single organization capable of being responsible for compliance," he wrote. "The proposed rule, as applied to DEXs, would be just such an impossible requirement."

"The Commission has failed to engage in a real economic analysis and instead used the patina of an economic analysis to justify its policy preferences," Grewel continued. 

 


© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

AUTHOR

MK Manoylov has been a reporter for The Block since 2020 — joining just before bitcoin surpassed $20,000 for the first time. Since then, MK has written nearly 1,000 articles for the publication, covering any and all crypto news but with a penchant toward NFT, metaverse, web3 gaming, funding, crime, hack and crypto ecosystem stories. MK holds a graduate degree from New York University's Science, Health and Environmental Reporting Program (SHERP) and has also covered health topics for WebMD and Insider. You can follow MK on X @MManoylov and on LinkedIn.

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To contact the editor of this story: Nathan Crooks at [email protected]

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