Paul Grewal has filed a petition with the US Securities and Exchange Commission to establish clear rules concerning digital asset securities. He stated that the DOJ and the SEC are analyzing the same evidence but have different opinions on the assets involved.
The US Securities and Exchange Commission (SEC) is reportedly investigating Coinbase, alleging that the firm listed unregistered securities on its platform.
In this regard, the regulatory agency has taken action against the exchange on previous occasions. In 2021, they intended to sue Coinbase over another securities-related product called Coinbase Lend.
On July 21st, the SEC also charged one of the former employees of Coinbase with violating its insider trading rules. Before the platform offered some tokens, he leaked classified information to help his brother and a friend.
Jim Cramer, the TV investment guru, said he had waited for this SEC investigation into Coinbase for years. He commented that no one could do whatever they wanted with securities in the United States.
The SEC Investigates the Exchange for Listing Allegedly Unregistered Securities
According to Bloomberg, the SEC alleged in this investigation that nine tokens listed on Coinbase platforms are securities. These crypto assets are AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM.
The SEC has increased its scrutiny of Coinbase since the platform expanded the number of tokens in which it offers transactions. Two people said they did not want anyone to know their names, as the investigation has not yet become public knowledge.
However, Paul Grewal, the chief legal officer of Coinbase, has officially denied these allegations, claiming that the exchange does not list securities. He also requested the SEC to establish clear rules concerning digital asset securities.
Grewal reiterated that the SEC has already reviewed its rigorous due diligence process to keep securities off its platform. Besides, he stated that they look forward to working with the SEC on that matter.
Faryar Shirzad, the CPO of Coinbase, said that they requested the SEC to develop a workable regulatory framework. They want formal procedures and a public notice and comment process to guide digital asset securities, not a secretly-developed arbitrary app or guidance.
Coinbase Objects to the Investigation against It by the SEC
Shirzad says that Coinbase agrees with Commissioner Pham but completely disagrees with the decision by the SEC. The agency brought these securities fraud charges and the substance of the accusations.
Paul Grewal stated that the US Department of Justice (DOJ) and the SEC are analyzing the same evidence. However, he pointed out that only the latter considers the crypto assets involved in the insider trading case to be securities.
Grewal explained that they had cooperated with the DOJ and the SEC in this investigation. He said the Department of Justice reviewed the same facts and chose not to file securities fraud charges.
Therefore, Coinbase disagrees with the SEC in that nine digital assets listed on its platform are securities. He said they have a rigorous process to analyze and review each digital asset before offering it on its exchange.
By Alexander Salazar
