Coinbase CEO Brian Armstrong has announced the company will no longer engage with law firms that employ individuals involved in regulatory actions perceived as unfavorable to the cryptocurrency industry. This decision has already resulted in Coinbase ceasing its professional relationship with Milbank LLP following the hiring of Gurbir Grewal, former Director of the U.S. Securities and Exchange Commission’s (SEC) Division of Enforcement.
Armstrong expressed concern about regulatory policies pursued during Grewal’s tenure at the SEC, which included stringent enforcement actions against crypto firms. His time as SEC enforcement director from 2021 to 2024 saw over 2,400 cases prosecuted, generating over $20 billion in penalties. Grewal was particularly active in addressing compliance violations within the digital asset sector, contributing to over 100 enforcement actions targeting cryptocurrencies and blockchain companies.
Milbank’s decision to appoint Grewal as a partner in its Litigation and Arbitration Group was highlighted as a strategic move to bolster its expertise in regulatory compliance and litigation. However, Armstrong views such appointments as a potential conflict for Coinbase, which is actively defending itself against SEC lawsuits alleging it operated unregistered securities offerings and platforms.
Armstrong’s stance underscores escalating tensions between the crypto industry and U.S. regulators. Coinbase has openly criticized the SEC for what it describes as a lack of clarity and support for the digital asset ecosystem, advocating instead for comprehensive legislation tailored to cryptocurrencies. The company’s decision to sever ties with Milbank reflects a growing divide between industry participants and regulatory bodies, with Armstrong positioning Coinbase as a champion of crypto-friendly reforms.
The implications of this decision extend beyond Coinbase, raising questions about the ability of law firms to maintain neutrality while representing clients in highly polarized industries. It also highlights the increasing scrutiny faced by former regulators entering private practice, particularly in sectors they once oversaw. As the legal and regulatory landscape around digital assets continues to evolve, such tensions are likely to shape the strategies of both companies and law firms navigating these complexities.
Grewal, who previously served as Attorney General of New Jersey before joining the SEC, has defended his record, emphasizing his commitment to investor protection and market fairness. His work has included actions against insider trading, fraud, and compliance violations, aiming to uphold the integrity of financial markets. As a Milbank partner, Grewal is expected to bring his expertise to high-stakes cases, particularly those involving white-collar crime and regulatory enforcement.
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