Major Policy Shift Ahead? Coinbase’s Paul Grewal Forecasts SEC Overhaul Under Trump

Under a Trump administration, Coinbase’s Chief Legal Officer Paul Grewal says the U.S. Securities and Exchange Commission (SEC) could shift majorly towards cryptocurrency regulation. In a recent Fox Business interview, Grewal predicted a ‘significant change’ to focus at SEC and that the agency might shift its focus from large bitcoin crackdowns to targeted instances of fraud and scams. He said:

“I think the new administration will take a fresh look at all the existing crypto cases brought under Gary Gensler and distinguish between the ones aimed at what are clearly scams and fraud and ones that are not.”

Already, President-Elect Donald Trump announced his intent to replace the SEC’s top leadership. He campaigned to get rid of current SEC Chair Gary Gensler on day one, and that promise has been spoken to crypto advocates who see Gensler as too hard on digital assets.  

Grewal Pushes for a Shift in SEC’s Approach to Crypto Oversight

However, Gensler’s tenure has come with a series of enforcement actions against larger players in the crypto space, including Coinbase and Ripple, whose critics worry stifles innovation in an increasingly burgeoning industry. Grewal thinks a change in leadership could improve things at the SEC and result in constructive engagement with the industry as opposed to confrontational legal warfare.  

Grewal called on the SEC to focus on bad actors and fraudulent schemes. Far too much of what this means is fouled by endless litigation, and far too little is clear in the broader crypto industry. Along with Ripple CEO Brad Garlinghouse, another vocal critic of the SEC’s current stance on crypto regulation, has commented on the political cutting edge of crypto regulation. Business Insider reported that Garlinghouse took to social media platform X (formerly Twitter) to accuse Gensler of overstepping legal boundaries and could alienate voters in key swing states.  

Garlinghouse said: “I hope the Dems find a way to hold Gary Gensler accountable for ignoring the law.”  

Looking ahead, he argued that a dissatisfaction with crypto policies under the Biden administration could lead to a ‘Red Reset’ a political realignment that skews voter allegiance away from Democrats. Garlinghouse also cited other well known crypto critics including Senator Elizabeth Warren as ‘fueling’ voter discontent.  

Grewal and Garlinghouse have both argued that clear and consistent crypto regulations are crucial to the crypto industry and for its stakeholders because of the current regulatory landscape of uncertainty. 

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The Potential Shift in SEC’s Focus Under Trump Administration

Under the Trump Administration, Grewal said the SEC could become a more collaborative agency and lead a productive dialogue with crypto companies, developing a framework that addresses consumer protection and encourages innovation.  

Grewal said voters and the industry both want clear rules. This is not in anybody’s benefit: it is not beneficial for anybody that it becomes an endless lawsuit cycle. After the election, Grewal posted on X on Tuesday:

“I hope SEC understands what has happened tonight. On many, many issues, the voters said loud and clear that they want change. Crypto is no exception. Stop suing crypto. Start talking to crypto. Initiate rulemaking now. There’s no reason to wait.”

Crypto regulation and politics is becoming a hot topic, leader such as Grewal and Garlinghouse are stressing out how the two constituents entail effect their voters and future elections. Industry surveys suggest crypto investors value regulatory clarity and fairness above all other investment priorities and a less combative SEC would likely repair public trust in digital assets and government oversight. 

Trump has made a series of statements indicating a wish for a more collaborative approach to regulation and the crypto community is watching closely. That would generate hope for innovation but is it going to balance enforcement with promoting the digital asset ecosystem in the right way.

Conclusion

Crypto industry looks forward to additional targeted enforcement and coordinated approach from a potential Trump led SEC. Grewal and Garlinghouse are hoping this will entice innovation, rebuild trust with voters and alleviate concerns that crypto policies are lost in translation and unfair.

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