Coinbase calls on President-elect Donald Trump to replace SEC chair Gary Gensler, citing crypto industry concerns

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Coinbase Chief Legal Officer Paul Grewal has urged President-elect Donald Trump to replace Securities and Exchange Commission Chair Gary Gensler, accusing the regulator of pursuing a "regulation-by-enforcement" strategy that has created uncertainty across the cryptocurrency industry.

Speaking at a blockchain conference in New York, Grewal criticised the SEC’s approach under Gensler, arguing that the absence of clear and consistent rules has made it increasingly difficult for digital asset companies to operate confidently in the United States.

Grewal said, "Gary Gensler’s approach has created uncertainty and hindered the growth of the crypto industry. Instead of fostering innovation, the SEC has chosen to regulate through enforcement, leaving businesses and investors in a constant state of ambiguity."

Since becoming SEC Chair in 2021, Gensler has maintained that many cryptocurrencies should be treated as securities and therefore fall under the agency’s jurisdiction. His tenure has included enforcement actions against major crypto companies, including Coinbase and Binance, over allegations that they operated unregistered securities platforms.

Grewal called for a more collaborative regulatory framework that provides companies with clear requirements before enforcement action is taken.

He said, "Crypto is here to stay, and it’s time we had a regulatory framework that reflects its potential. We need leadership at the SEC that understands the importance of working with the industry to create rules that protect investors without stifling innovation."

Blockchain analyst Mark Lewis said a change in SEC leadership could significantly alter the regulatory environment.

Lewis said, "Replacing Gensler with someone open to dialogue and innovation could be a turning point for the industry. It would signal a shift towards a more collaborative regulatory environment."

Grewal concluded, the United States has an opportunity to lead the world in crypto innovation but to do that, we need clear rules and regulators who understand the transformative potential of this technology.