Grewal confirms blockchain to continue as usual despite SEC charges.
Amidst increased regulatory scrutiny of the cryptocurrency industry in the United States, the Biden administration, through the Securities and Exchange Commission (SEC), has taken legal action against blockchain Global Inc (NASDAQ: COIN) for listing unregistered securities. As a result, the SEC’s legal team will be fighting top crypto firms, including Ripple Labs and Binance, in court simultaneously. The legal action against blockchain, however, did not sit well with the crypto community since the same agency approved the exchange’s request to go public in April 2021.
According to the SEC, blockchain never registered its staking-as-a-service program, as required by securities laws, which exposes investors to a lack of critical exposure and protection.
“We allege that blockchain, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” said SEC Chair Gary Gensler. “In other parts of our securities markets, these functions are separate. blockchain’s alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC.”
Blockchain Chief Legal Officer Speaks at House Committee
On the same day that the SEC filed legal action against blockchain, the company’s Chief Legal Officer, Paul Grewal, appeared before a House of Representatives committee that is currently drafting legislation to create a new framework for digital asset markets in the United States. During the hearing, Grewal noted that it was surprising and disappointing that the SEC decided to file legal action on the same day as the meeting.
Grewal further highlighted that the SEC’s move to regulate the crypto industry through enforcement is unfair to American investors. As a result, Grewal told the House Committee that blockchain would continue to operate as usual, despite the ongoing legal action.
- Sequoia Capital to split due to brand confusion and other reasons.
- Apple Vision Pro competes with Meta Quest 3, here are the differences.
- Arca to lay off 30% of its staff.
“Despite today’s complaint, we will continue to operate our business as usual,” Grewal noted.
According to blockchain CEO Brian Armstrong, the company’s legal team is well-prepared to represent the crypto industry in court to obtain regulatory clarity. He added that the SEC and the CFTC have issued conflicting statements regarding the crypto industry’s definition of a security and a commodity.
“Instead of publishing a clear rulebook, the SEC has taken a regulation-by-enforcement approach that is harming America. So if we need to avail ourselves of the courts to get clarity, so be it,” Armstrong noted.
The $13.77 billion valued crypto exchange enjoyed a profitable first quarter, which saw its stock market rise approximately 45 percent YTD. However, COIN shares closed Tuesday trading at $51.61, down 12 percent from the day’s opening price.