Coinbase CEO Urges New SEC Chief to Drop ‘Frivolous’ Crypto Lawsuits

Key Takeaways

• Coinbase CEO demands an apology from the SEC for wasting investors’ time.
• Brian Armstrong wants the new SEC chief to drop its “frivolous” crypto lawsuits.
• Coinbase is fighting the SEC in multiple legal battles.

SEC chair Gary Gensler’s term expires in June 2025. However, many believe he may exit earlier due to the outcome of the U.S. election.

In a provocative call to action and possibly a rebuke of Gensler’s controversy-ridden leadership, Coinbase CEO Brian Armstrong wants the next Securities and Exchange Commission (SEC) chief to apologize to American crypto investors for wasting their time and withdraw the extensive list of “frivolous” lawsuits against crypto companies.

Highlighting the SEC’s Hypocrisy

In a recent tweet , Armstrong posted a flowchart illustrating the SEC’s shifting stance on digital assets over the years.

The chart showed how the agency has vacillated on key issues, such as whether digital assets constitute securities or assets.

In 2018, the SEC claimed that digital assets themselves could not be securities, only to reverse course in 2021 and argue that digital asset transactions represent investment contracts.

The SEC’s stance has continued to evolve since. The agency recently admitted that its use of the term “crypto asset security” was incorrect and confusing.

Despite the overall confusion and uncertainty, the SEC has levied several charges and fines against emerging crypto projects instead of establishing clearer rules.

Coinbase Takes on the SEC

Coinbase, led by Armstrong, is one of the few crypto companies fighting the SEC head-on rather than settling with the regulator.

The exchange is currently embroiled in multiple legal battles with the SEC, including a security lawsuit in which the agency alleges that Coinbase violated securities law by failing to register before offering crypto trading services.

In its latest filing, Coinbase submitted an amicus brief on behalf of the Decentralized Finance Education Fund and Beba, arguing that the SEC’s enforcement approach is stifling innovation in America.

The brief takes aim at the regulator’s tactic of targeting crypto companies for violating laws that are unclear or nonexistent.

Coinbase’s chief legal officer, Paul Grewal , amplified this criticism in a recent post, saying,

“The SEC proclaims the existing rules work for digital assets, yet gives no indication as to when the rules apply and how digital-asset firms possibly can comply with them. Meanwhile, companies face punitive, retroactive SEC enforcement actions for failing to achieve the impossible.”

The filing and Grewal’s remarks underscore Coinbase’s commitment to pushing back against the SEC’s perceived overreach.

The exchange’s pursuit of justice for the crypto community is all the more notable given the SEC’s own inconsistent treatment of Coinbase.

In 2021, the agency cleared the exchange’s listing on Nasdaq without objection, despite allegedly having concerns about the “securities” offering.