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Coinbase Chief Legal Officer Disputes SEC Chairman Gensler’s Claim That Most Crypto Tokens Are Securities
Coinbase head of legal department Paul Grewal invited the president of the US SEC Gary Gensler to stop misleading the market about the legal status of cryptocurrencies in a May 7 social media post.
Grewal made this statement in response to Gensler’s recent CNBC interview with Andrew Sorkin, in which he said numerous digital assets fall into the category of securities under existing law.
However, Grewal countered that the SEC chairman’s claims were false as the watchdog’s lawyers had previously acknowledged that cryptocurrencies do not fall within the definition of securities.
In his message to Gensler, Grewal stated unequivocally:
“Please stop deceiving the market: tokens are NOT securities. Despite their defenses, your own lawyers admitted this in court.”
Inadequate cryptographic disclosure
Meanwhile, Gensler reiterated his well-known position that most cryptocurrencies are security tokens in his CNBC interview, adding that they often lack the necessary information for assets in this class.
According to the SEC Chairman:
“Without prejudice to any of them, many of these tokens are securities under the law of the land, as interpreted by the United States Supreme Court. So we follow that law and you, the investors, are not receiving the required or necessary information about those assets.”
While Gensler did not specify which cryptocurrencies he considers securities, recent regulatory actions suggest so all major tokensexcluding BitcoinI’m under scrutiny.
Since taking on the role of SEC chairman, Gensler has set priorities bring cryptocurrencies into the commission’s regulatory ambitciting the Howey test as a benchmark for determining the status of securities.
The critics did criticized Gensler’s enforcement-focused approach, instead supporting legislative clarity in Congress. However, progress on cryptocurrency-related legislation has been slow, prolonging uncertainty in the industry.
Several crypto entities, including Binance, Coinbase and Ripple, are involved in legal battles with the Gensler-led commission. Additionally, over the last month, the Financial Supervisory Authority has issued Wells warnings to other major cryptocurrency companies, such as Uniswap, Consentsand digital trading platform Robin Hood.