Coinbase CEO’s Warning to Law Firms
On Tuesday, Brian Armstrong, the CEO of Coinbase, issued a significant warning regarding the exchange’s future relationships with law firms involved with individuals connected to what he termed “bad deeds” under the Biden administration. This statement came in the wake of growing frustrations within the crypto community regarding the government’s regulatory stance on the industry.
Concerns Over Regulatory Actions
In a post shared on X (formerly Twitter), Armstrong expressed concern that many senior partners at law firms remain oblivious to the anger felt by the crypto community about the actions taken by the administration. He firmly stated that if such firms continue to hire personnel linked to detrimental policies affecting the cryptocurrency sector, Coinbase would terminate its partnerships with them.
Milbank Example and Ethical Standards
A specific example highlighted by Armstrong was the law firm Milbank, which recently brought on Gurbir Grewal, a former head of the SEC’s Division of Enforcement. Grewal oversaw numerous enforcement actions against various entities in the crypto industry, including Coinbase itself. Due to this hiring decision, Armstrong declared that Coinbase has ceased any collaboration with Milbank, asserting, “We don’t work with them now (and never will while he works there).” He described the hiring as a violation of ethical standards, arguing that individuals in such positions cannot merely claim they were following orders when they had the choice to leave the SEC.
Crypto Industry’s Perspective on Enforcement
During his tenure at the SEC, Grewal participated in numerous lawsuits against key players in the cryptocurrency market, including Coinbase and Binance. These actions accused these platforms of operating without adhering to federal securities laws, which critics argue has hindered the overall growth of the industry. Rather than issuing clear regulations, the SEC’s method of “regulation by enforcement” through lawsuits created confusion and uncertainty in compliance for businesses in the space.
Broad Interpretation of Securities
While Grewal believed that many digital tokens qualified as securities based on the Howey Test, many industry participants contended that such a broad interpretation stifled innovation. Critics claimed that this rigid approach failed to recognize the diverse characteristics of various digital assets and ultimately restrained industry growth.
A Call to Action for Crypto Leaders
Armstrong encouraged fellow cryptocurrency executives to take a similar stance by cautioning law firms about the potential repercussions of hiring individuals who have historically opposed the industry’s interests. His determination to safeguard the crypto community’s values resonated well with many users on X, who praised his leadership and commitment. Recently, Armstrong was also reported to have a meeting with President-elect Donald Trump, where they discussed possible candidates for key positions in the upcoming administration.