Coinbase CEO Warns Against Hiring Former SEC Staff

Coinbase CEO Brian Armstrong recently made a bold statement warning law firms about hiring former Securities and Exchange Commission (SEC) officials who have been critical of the cryptocurrency industry. This came after Gurbir S. Grewal, the former SEC Enforcement Director, joined Milbank’s litigation and arbitration group.

Armstrong took to social media to announce that Coinbase would cut ties with any legal firm that employs individuals who have been hostile to the crypto industry in the past. He stated, “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.”

It’s worth noting that Coinbase is currently not working with Milbank as long as Grewal is associated with the firm. Grewal, during his time at the SEC, played a role in enforcement actions against major U.S. crypto firms like Coinbase, Kraken, and Ripple, as well as global companies such as Binance.

Under the leadership of outgoing SEC Chair Gary Gensler, the scrutiny of the crypto sector has increased significantly, with multiple Wells Notices being issued to various firms signaling potential enforcement actions.

Armstrong criticized the SEC’s regulatory approach, claiming that it is unethical for the agency to implement rules without clear guidelines. He also pointed out that those who had the option to leave the SEC but chose to stay cannot simply claim they were following orders.

Looking ahead, the crypto industry is hopeful for a more favorable regulatory environment under the incoming administration. There are indications that the Trump administration plans to revamp the SEC’s stance on cryptocurrencies, with a commitment to dismantle what they refer to as “Operation Choke Point 2.0,” which impacts financial services access for crypto businesses.

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