Coinbase CEO Brian Armstrong warned law firms not to take on former Securities and Exchange Commission staff it sees as hostile to the crypto industry under the leadership of outgoing Chair Gary Gensler and the Biden administration.
“We've let all the law firms we work with know that if they hire anyone who committed these bad deeds in the (soon to be) prior administration, we will no longer be a client of theirs,” Armstrong posted to X late Monday.
The Coinbase CEO claimed that partners at these law firms seemed “unaware of the crypto industry’s position on this,” highlighting Milbank’s appointment of former SEC Enforcement Division Director Gurbir S. Grewal as a partner in October. “We don't work with them now (and never will while he works there),” Armstrong said.
As the security watchdog’s top cop, Grewal filed enforcement actions against several prominent U.S.-based crypto companies, including Coinbase, Kraken and Ripple, as well as international entities like Binance.
During the current administration, the SEC issued a slew of Wells Notices to crypto firms, including Uniswap Labs, Robinhood Crypto and OpenSea, informing them that enforcement action may be pending.
Gensler, who recently announced plans to leave the agency on January 20, 2025, has persistently maintained that most cryptocurrencies qualify as securities and urged crypto firms to register with the SEC. However, some in the crypto industry have fought back, saying that it's impossible to register with the agency, partly because rules were made for more traditional entities that are different from the digital asset industry.
“It's an ethics violation in my book to try and unlawfully kill an industry while refusing to publish clear rules,” Armstrong said. “If you were senior there, you cannot say you were just following orders. They had the option to leave the SEC, and many good people did. It was not a normal SEC tenure.”
Armstrong clarified he had no issue with them seeking employment elsewhere and did not believe in “permanently canceling people,” but said the crypto industry should not be putting money in their pocket given the agency’s stance during the period. “Let your law firms know that hiring these folks means losing you as a client,” he urged other crypto businesses.
Following several pro-crypto pledges during the U.S. election campaign, including a promise to fire Gensler and dilute the SEC’s role under a new crypto-friendly regulatory framework, there is hope in the industry that incoming President Donald Trump’s administration will work with it more collaboratively.
Trump also pledged to end “Operation Choke Point 2.0,” referring to the alleged targeted actions to disconnect crypto businesses from financial services amid heightened regulatory oversight in recent years. Armstrong previously said this alleged debanking of crypto firms was “one of the most unethical and un-American things that happened in the Biden administration,” suggesting it was a major factor in the Democrats losing the election.
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