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As SEC-Coinbase fight begins, it’ll be Grewal vs Grewal in the courthouse

New York, June 11 (IANS) Indian-origin Paul Singh Grewal, an attorney working as chief legal officer at crypto exchange Coinbase which is in the thick of controversy, feels that crypto is solving real-world problems and the world needs a clear path forward to protect responsible innovation.

Previously vice-president and deputy general counsel at Facebook, and former US magistrate judge for the US District Court for the Northern District of California, Paul Grewal is leading the charge against the US Securities and Exchange Commission (SEC) which sued Coinbase for securities law violations.

Coincidentally, Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, has stressed that “while Coinbase’s calculated decisions may have allowed it to earn billions, it has done so at the expense of investors by depriving them of the protections to which they are entitled”.

“The action seeks to hold Coinbase accountable for its choices,” he said in a SEC release.

Immediately before joining the SEC, Gurbir Grewal was the Attorney General for the State of New Jersey. Prior to that, he served as the Bergen County Prosecutor, the chief law enforcement officer for New Jersey’s most populous county.

Earlier in his career, Grewal served as an Assistant US Attorney for the District of New Jersey, where he was Chief of the Economic Crimes Unit, and an Assistant United States Attorney for the Eastern District of New York, where he was assigned to the Business and Securities Fraud Unit.

The SEC has listed 13 cryptocurrencies as securities in the lawsuit against Coinbase.

However, according to Coinbase’s Paul Grewal, “We need a clear rulebook in the US to achieve the full promise of crypto.”

“Until rules and laws are developed that reflect the realities of this new economic system, we cannot realise the full potential of making our financial system faster, fairer, and more affordable,” he said in a tweet.

“The US is falling behind. We cannot afford to ignore crypto while other markets take advantage of our absence, developing rules and regulations that enable the industry to thrive and risk sending jobs, investment, and technological leadership overseas,” Paul Grewal added.

He called for the US Congress to adopt a draft bill laying out a regulatory framework around cryptocurrency transactions.

Calling the SEC’s move “disappointing, but not surprising”, Paul Grewal criticised the commission for what he said is its “reliance on enforcement-only approach”.

“The solution is legislation that allows fair rules for the road to be developed transparently, and applied equally, not litigation,” said Paul Grewal.

Despite the complaint, “we will continue to operate our business as usual”, he added.

According to SEC’s Gurbir Grewal, “You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great.”

“As alleged in our complaint, Coinbase was fully aware of the applicability of the federal securities laws to its business activities, but deliberately refused to follow them,” he noted in the SEC release.

Paul Grewal, however, has a different take on crypto.

“How we define digital assets is critical for enabling innovation. Digital assets are diverse, and if we fail to effectively draw clear definitions of which assets are securities, which are commodities, and which are neither, crypto will continue to sit in regulatory limbo,” he emphasised.

While there are many details to be ironed out, “the Digital Asset Market Structure Discussion Draft is a strong step towards developing a regulatory regime that embraces innovation, maintains US industry presence and protects consumers”, Paul Grewal emphasised.

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