In a fiery statement, Paul Grewal, chief legal officer of Coinbase, has expressed his strong disagreement with the U.S. Securities and Exchange Commission’s (SEC) classification of certain cryptocurrencies as securities. Grewal argues that the SEC’s interpretation of “investment contract” is not only incorrect but also violates existing regulations. Here are the key points:
- The SEC’s understanding of “investment contract” is against the law.
- Grewal criticizes the SEC for claiming authority over all non-BTC digital assets, which he believes is not supported by enforceable rights between businesses and buyers.
- Grewal draws on the Supreme Court’s ruling in the Biden v. Nebraska case, suggesting that the major questions doctrine could be used in Coinbase’s battle with the SEC.
- The major questions doctrine states that if the executive branch does something significant and unprecedented, the court will examine whether Congress authorized it.
- Coinbase argues that Congress must first regulate digital assets to establish standards before the SEC’s new interpretation of securities law can be accepted.
Hot Take: Grewal firmly believes that Congress is actively working on implementing standards for digital assets, making it clear that the SEC’s actions are unwarranted. Coinbase is determined to challenge the SEC’s complaint using the major questions doctrine as its foundation.
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