Coinbase Pushes SEC to Lift Crypto Ban on Staff for Effective Regulation

Coinbase is requesting the SEC to remove the ban on staff buying, selling, or using cryptocurrencies that aren’t classified as securities. They believe that it will help regulators better understand and manage the crypto market.

In letters dated April 22, Coinbase’s CLO, paul grewal paul grewal paul grewal Chief Legal OfficerDirector requested that the SEC Chair, Paul Atkins, and the U.S. Office of Government Ethics change the policy. 

He argues that it limits the SEC’s ability to oversee the crypto industry effectively. Grewal further added that the ban is particularly concerning, as President Donald Trump Donald Trump   Donald J. Trump is a US-based entrepreneur, Pro-crypto Politician, and the 45th and 47th President of the United States of America. He understands the importance and needs of the modern fintech world, and people look up to him as a dominant pro-crypto leader.   Quick Facts   Full name Donald John Trump Birth 14-06-1946, New York, United States Nationality American Education BS from the University of Pennsylvania Known For Businessman, Pro-Crypto Politician   Once doubtful about Bitcoindominance, he said in a tweet in 2019, “I am not a fan of Bitcoin", but now has a significant amount of cryptocurrency holdings in his kitty. He has also signed an Executive Order to establish a Strategic Bitcoin Reserve, which highlights his commitment to the future of cryptocurrency.   Donald Trump - Career Highlights & Events   2016 – Elected as the 45th President of the United States from the Republican Party.   2017 – Signed the Tax Cuts and Jobs Act, impacting investment environments   2019 – Criticized Bitcoin and Libra on X, dubbing them as "not money"   2024 – Campaign signals potential openness to crypto-friendly reforms   2025 –  Elected as the 47th President of the United States from the Republican Party.   A meme coin, $TRUMP, is associated with Donald Trump, which is listed on the Solana blockchain platform. His family also backs World Liberty Financial (WLF), a crypto venture.     President has ordered the SEC and other agencies to submit recommendations for advancing the US leadership in digital finance within 180 days. 

“SEC staff still cannot use the technology they are meant to regulate,” he pointed out. 

Grewal acknowledged that only the OGE has the authority to rescind the legal advisory. He also suggested solutions like issuing waivers to staff working on crypto matters, which will allow them to better understand and evaluate the technology they regulate. This approach would align with previous actions in similar situations, which will help the SEC craft better crypto regulations. 

Grewal Proposes Lifting SEC’s Crypto Ban with Restrictions

Grewal suggests lifting the ban, allowing SEC staff to hold cryptocurrencies, provided they aren’t involved in related matters. He proposes that staff be permitted to hold only major cryptocurrencies and stablecoins, with a limit on the amount they can own. 

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Many believe that the blanket crypto ban on the SEC staff is an overreach. Ji Kim, President of the Crypto Council for Innovation, compared it to the Federal Reserve banning staff from holding dollars due to their role in monetary policy. 

Those who support the restriction argue that it will prevent conflict of interest, insider trading, and other ethical risks. But still, there’s widespread agreement that regulators must understand the technology they regulate.