Coinbase CEO Brian Armstrong's Warning

Coinbase CEO Brian Armstrong has cautioned law firms against hiring former Securities and Exchange Commission (SEC) staff viewed as hostile to the crypto industry, especially under outgoing Chair Gary Gensler.

In a post to X on Monday, Armstrong revealed that Coinbase would sever ties with any law firm that employs individuals he deems responsible for negative actions against the crypto industry during the previous administration. He specifically pointed to law firm Milbank's hiring of Gurbir S. Grewal, former SEC Enforcement Division Director, suggesting they are ignorant of the crypto sector's stance. Armstrong stated, "We don't work with them now (and never will while he works there)."

Grewal's tenure at the SEC involved enforcement actions against major crypto companies such as Coinbase, Kraken, and Ripple, as well as internationally recognized firms like Binance. The SEC has also sent Wells Notices to various crypto entities like Uniswap Labs and Robinhood Crypto, signaling potential enforcement actions.

Despite Gensler's insistence that most cryptocurrencies should be treated as securities, many in the crypto space argue it is impractical to register given the agency's traditional framework. Armstrong criticized the SEC's lack of clear rules, labeling the actions as unethical and calling for accountability among former SEC employees. He maintained that while these individuals could seek work elsewhere, the crypto industry should not financially support them.

Potential Changes with Incoming Administration

With the arrival of a new administration, there are expectations for a more crypto-friendly SEC under President Donald Trump, especially considering his campaign promises to dismiss Gensler and change the regulatory approach. Trump has also vowed to dismantle "Operation Choke Point 2.0," targeting alleged actions against crypto businesses separating them from financial services, which Armstrong has termed unethical and a contributing factor to the Democrats' electoral loss.