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04/03/25
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Coinbase Probes SEC Spending on Crypto Regulation Amid Changing Enforcement Landscape
Coinbase is currently investigating the expenditures the U.S. Securities and Exchange Commission (SEC) has made in enforcing regulations against cryptocurrency firms. The exchange’s chief legal officer, Paul Grewal, disclosed that a request was submitted under the Freedom of Information Act (FOIA) to uncover the number of investigations and enforcement actions initiated against crypto companies within the timeframe of April 17, 2021, to January 20, 2025. The inquiry aims to review the labor costs associated with these actions, including the number of SEC employees involved and any third-party contractors hired.
Grewal underscored the negative impact of the SEC’s regulatory approach, positing that it has hindered innovation, jeopardized the nation’s leadership in technology, and diminished job opportunities. He emphasized the need to understand the financial burden these enforcement actions have placed on taxpayers. The request specifically seeks details about the Crypto Assets and Cyber Unit, which was responsible for prosecuting fraudulent or unregistered crypto offerings. This unit, established in 2017, has since been rebranded as the Cyber and Emerging Technologies Unit.
Although gathering the sought-after information may be a lengthy process, Coinbase is committed to pursuing it diligently. In a notable shift in direction, the SEC has recently started to withdraw a number of lawsuits against various cryptocurrency exchanges, revealing a change in its regulatory strategy. After suing Coinbase in June 2023 for allegedly failing to register properly, the SEC voluntarily dismissed all litigation against the exchange by February 27, marking a conclusive end to that case.
Furthermore, the SEC has also terminated its lawsuits against other platforms, including the crypto exchange Kraken and firms like Yuga Labs and Gemini, indicating a potentially more lenient regulatory environment following a period of aggressive enforcement under previous leadership. This evolution in the SEC’s stance coincides with the departure of former SEC Chair Gary Gensler, who had been instrumental in implementing stringent regulations on the crypto industry.
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