Paul Grewal, the chief legal officer of American cryptocurrency exchange Coinbase, has corrected a supposed misconception in its case with the United States Securities and Exchange Commission (SEC).
SEC's apology for securities categorization
The conversation started with Grewal's earlier X post citing the SEC’s open apology for falsely and repeatedly stating that tokens are securities. The Coinbase executive acknowledged that the move was remarkable.
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Thereafter, FOX Business Journalist Eleanor Terrett noted that this regulator's admission could bolster the fair notice defense for firms like Binance, Kraken and Coinbase that the agency has sued.
“If the SEC is now apologizing for causing market confusion with their 'crypto asset security' terminology and the prior assertions that tokens themselves can be securities regardless of circumstances surrounding the transactions, can firms now more reasonably argue they were not given fair notice of what exactly makes a token a security in the eyes of the SEC?” Terrett asked.
In a recent court filing, she pointed out that Kraken has already addressed its fair notice defense. On the other hand, the court rejected Ripple and Coinbase's fair notice defenses. However, Grewal quickly corrected her statement, stating that Kraken's fair notice defense has yet to be rejected. The Coinbase executive said the notice is very much in play. He buttressed these claims when he noted that Judge Failla made this very clear in the Sept. 5 hearing.
Crypto industry regulation sees glimpse of clarity
It is worth noting that the SEC is gradually gaining clarity on some of these crypto firms, including Coinbase. On Friday, Grewal noted that the regulator has conceded that Ethereum is not a security.
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He still expects that the regulator will adjust its regulations to accommodate other tokens as non-securities, as it has with Bitcoin and Ethereum.
On the other hand, some analysts and top industry players believe the SEC is overstepping its jurisdiction by regulating assets.
