Coinbase CEO Brian Armstrong Takes a Firm Stand Against SEC’s Former Officials
Coinbase CEO Brian Armstrong has made a bold statement, severing ties with any law firms that hire former U.S. Securities and Exchange Commission (SEC) officials involved in what he deems an “unlawful” campaign to “kill” the cryptocurrency industry. Armstrong voiced his concerns on social media, stating that Coinbase will no longer be working with any law firms that choose to employ individuals who led regulatory actions against crypto companies during the previous administration.
In a tweet posted on Monday, Armstrong declared, We’ve let all the law firms we work with know that if they hire anyone who committed these bad deeds in the (soon to be) prior administration, we will no longer be a client of theirs.
Armstrong Targets Milbank Law Firm for Hiring Former SEC Official
Armstrong specifically called out Milbank, a prominent global law firm based in New York, for hiring Gurbir Grewal, the former head of the SEC’s Division of Enforcement, as a partner. During his tenure at the SEC, Grewal led the charge in regulatory actions against several crypto firms, including lawsuits against major players like Coinbase and Binance. Armstrong didn’t hold back, stating: Milbank recently messed up and hired Gurbir. We don’t work with them now (and never will while he works there).
Armstrong criticized the actions taken by Grewal and others at the SEC, describing them as an ethical violation. He argued that the SEC’s attempts to stifle the cryptocurrency industry lacked a solid legal foundation and clear rules, making it difficult for firms like Coinbase to operate within the regulatory framework. “It’s an ethics violation in my book to try and unlawfully kill an industry while refusing to publish clear rules,” Armstrong wrote.
SEC’s Aggressive Enforcement Under Gurbir Grewal
Under Grewal’s leadership, the SEC initiated over 100 enforcement actions, including several high-profile lawsuits aimed at regulating and scrutinizing crypto companies. While Grewal defended his actions as necessary to protect investors and combat fraud, Armstrong sees this as an overreach that hurt the broader crypto industry. Armstrong also highlighted that SEC officials had the option to leave the agency, with many choosing to do so due to their disagreements with its approach. If you were senior there, you cannot say you were just following orders. They had the option to leave the SEC, and many good people did, Armstrong added.
The Bigger Picture: Ethics and Industry Growth
While Armstrong emphasized that he doesn’t believe in permanently ostracizing individuals, he made it clear that the cryptocurrency community should refrain from supporting firms that hire figures who have worked against the industry. He urged the crypto sector to send a message to law firms: Let your law firms know that hiring these folks means losing you as a client.
The Coinbase CEO’s comments come at a time when the SEC itself is facing significant changes in leadership. Gary Gensler, the controversial chair of the SEC, has announced his resignation, effective January 20, 2025, coinciding with President-elect Donald Trump’s swearing-in. This marks a turning point in the SEC’s stance toward cryptocurrency regulation.
Leadership Changes at the SEC Could Signal a New Era for Crypto
In addition to Gensler’s resignation, SEC Commissioner Jaime Lizárraga also announced his departure, effective January 17, 2025, citing personal reasons. With these leadership changes looming, there is speculation that the SEC could shift its approach to cryptocurrency regulation, especially under the incoming leadership of President Trump. Bipartisan rules require at least one Democratic commissioner to remain, but Trump’s administration will likely have the opportunity to appoint new SEC members, potentially steering the agency in a direction more favorable to the crypto industry.
Implications for the Crypto Industry
Armstrong’s strong stance against former SEC officials, especially Grewal, signals a growing rift between the cryptocurrency sector and the regulatory bodies that have historically been at odds with it. As the SEC undergoes leadership changes and regulatory uncertainty continues, the future of cryptocurrency laws remains unclear. However, Coinbase’s move to sever ties with law firms employing figures from the previous SEC administration reflects an attempt to safeguard the industry’s long-term growth and influence the direction of future regulatory frameworks.
In the larger context, Armstrong’s bold actions could have a ripple effect across the broader crypto landscape. The crypto community may continue to pressure regulatory bodies to offer clearer guidelines, which could pave the way for better legal structures and industry growth.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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