'To Regulate Technology You Need To Understand It': Coinbase Calls For Policy Change To Allow SEC Staff Use Crypto

Coinbase wants SEC staff to be able to use cryptocurrencies.
The push comes deep into the window President Donald Trump has given financial regulators to submit proposals for cryptocurrency regulation.
The recent push is one of many Coinbase regulatory campaigns.

The U.S. cryptocurrency regulatory landscape has evolved rapidly under President Donald Trump. In just over three months, the Securities and Exchange Commission has gone from filing one cryptocurrency enforcement action after another to pausing or dismissing all major cases and investigations and hosting roundtables with industry leaders as Trump has ordered financial regulatory agencies, including the Commission, to submit cryptocurrency regulatory proposals within 180 days.

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But cryptocurrency firms are not easing up on their hunt for favorable regulations due to this change of fortunes. Highlighting this, Coinbase Global COIN, the largest exchange in the country by volume, has recently raised concerns that SEC staff may be limited in their ability to understand cryptocurrencies and, hence, suggest proper regulations around the market.

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Coinbase Calls For A Change Of SEC Policy

Coinbase wants SEC staffers, especially those working on cryptocurrency-related matters, to be able to use cryptocurrencies.

The firm said this in letters last week to the U.S. Office of Government Ethics, SEC Chair Paul Atkins and SEC Commissioner Hester Peirce, calling for the withdrawal of a policy restricting agency staff from holding or using cryptocurrencies or at least waivers for members of the cryptocurrency task force. The firm said in the letters that a lack of knowledge of how cryptocurrencies worked could impact the agency’s ability to advise on regulations.

“To regulate technology, you need to understand it. To understand technology, you need to use it,” Coinbase Chief Legal Officer Paul Grewal wrote in the letter to the OGE.

Coinbase’s push comes as half of the 180 days given to the SEC to submit cryptocurrency regulatory proposals has already passed. As such, the firm has called for an urgent response.

Addressing potential conflict of interest concerns, Coinbase asserted that most cryptocurrencies were not securities, posing no conflict for securities regulators. At the same time, the firm argued that agency staff could be limited to crypto assets like Bitcoin and Ethereum or stablecoins, whose value can hardly be determined by a market regulator.

Coinbase’s letters have received endorsement from Robinhood legal chief Dan Gallagher, a former SEC commissioner who was among the names floated as possible head of the regulator under Trump, Gallagher shared Coinbase’s letters with the caption, “Great point!”

The recent Coinbase letters are just one of many campaigns the firm has launched to ensure favorable regulations. Last week, the firm also launched a social media campaign to pressure five states, including California, New Jersey, Maryland, Washington and Wisconsin, to drop lawsuits alleging that its staking services amounted to securities.

“Every American should be able to access crypto staking. That is not the case today. We’re going to keep fighting to update the financial system,” Coinbase CEO Brian Armstrong said in an X post at the time.

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