All bad actors under the Biden administration, which is soon leaving office, could soon face some of the darkest moments in their careers. This follows a warning by Coinbase CEO to law firms against hiring those who performed “bad deeds” against the crypto industry under the outgoing Biden administration.
Taking to his X handle, cryptocurrency exchange Coinbase CEO Brian Armstrong singled out law firm Milbank recently hired Gurbir Grewal, who left the Securities and Exchange Commission (SEC) over three years ago, stating that the crypto community was still angry at the actions of such individuals. Armstrong warned that his firm was ending their partnership with Milbank, stating that “We don’t work with them now (and never will while he works there).”
Coinbase CEO Brian Armstrong
Coinbase CEO Brian Armstrong Says They Attempted to Kill the Industry
According to Armstrong, numerous bad actors, such as Grewal, were involved under the Biden administration, masterminding untold suffering for crypto industry players. The Coinbase CEO highlighted hundreds of legal actions against leading crypto exchanges like Binance and Coinbase, where the SEC alleged the platforms were operating outside the tenets of the U.S. federal securities laws.
Coinbase CEO Brian Armstrong opined that it was unethical for the officials to try to kill the industry without any clear rules unlawfully. He further observed that “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 believes that Grewal and other bad actors in the Biden administration used an excessively punitive approach that relied on “regulation by enforcement,” where lawsuits and not clearly defined regulatory guidelines defined the standards.
Enforce First, Make Rules Never
Under the stewardship of SEC chairman Gary Gensler, the regulator adopted an approach that digital industry experts have christened: “enforce first, make rules never.” The strategy, which Coinbase CEO Brian Armstrong and other experts argue could have been potentially effective in areas lacking clear guidance’ left the U.S. crypto industry facing serious regulatory uncertainty. Without any clear rules, the bad actors under the Biden administration used aggressive enforcement tactics that effectively stifled innovation and drove a lot of business overseas.
The main problem with such an approach, according to Armstrong, was the fact that the existing securities laws need to be better suited to serve the emerging digital asset industry. Despite the outgoing SEC chair Gensler asserting that “not liking the message is not the same as not receiving it,” there remained a lack of clarity on the application of the SEC’s rules and how they were applied to cryptocurrencies. While legislators, industry leaders and federal regulators all agreed there was confusion, Armstrong faults how the so-called bad actors in the Biden administration conducted their activities.
Armstrong Urges Crypto Industry Players to Avoid Bad Players
In what could herald dark days ahead for the alleged bad actors under the Biden administration, Armstrong took the bull by the horns by directly mentioning law firm Milbank, stating the firm “recently messed up and hired Gurbir,” who personally initiated over 100 enforcement actions against crypto exchanges. While criticizing his approach, Armstrong stated that Grewal overreached, emphasizing that “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.”
While stressing that he didn’t believe in permanently ostracizing an individual, he stated that the crypto industry should stop supporting firms that employ bad players in the outgoing administration who worked against the sector. He reminded other law firms that would consider hiring such individuals: “Let your law firms know that hiring these folks means losing you as a client.” Armstrong’s remarks come as the SEC itself is set for significant leadership changes under the incoming Trump administration.
Conclusion
The SEC’s enforcement-first approach has seen people like SEC Chair Gary Gensler face a lot of criticism and perhaps become among the most disliked bad actors under the Biden administration. While Gensler has announced his resignation effective January 20, 2025, only time will tell what career direction he and other officials who served under Biden will take and whether Armstrong’s sentiments will affect them one way or the other.
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