Chief Legal Officer at Coinbase, Paul Grewal, shared his frustration about the U.S. Securities and Exchange Commission (SEC) objecting to their engagement with Celsius, the bankrupt crypto lender platform.
Coinbase is proud to engage with Celsius to distribute crypto back to its customers. I wonder, why would the SEC object to a trusted US public company taking on this role? We look forward to addressing this with the bankruptcy court and undertaking our important role to make… https://t.co/5i1aJDiPXp— paulgrewal.eth (@iampaulgrewal) September 25, 2023
Recently, Celsius proposed to engage Coinbase as a distribution agent for international customers and sought the court’s approval of the Coinbase agreements. Grewal stated that Coinbase is proud to engage with Celsius to distribute crypto back to its customers.
The SEC responded to these proposals and stated that certain documents filed as part of the plan supplement were “inconsistent and raised concerns.” Moreover, the SEC said, “The Coinbase agreements go far beyond the services of a distribution agent, contemplating brokerage services and master trading services that implicate many of the concerns raised in the SEC’s District Court action against Coinbase.”
Furthermore, Grewal added that Coinbase is looking forward to addressing this issue with the bankruptcy court and asked, “Why would the SEC object to a trusted US public company taking on this role?”
Many users on X (formerly Twitter) replied to his post, criticizing the SEC’s move. One user said, “It’s simple. Coinbase’s role in the Celsius bankruptcy makes Coinbase look like a trusted good actor. The SEC wants Coinbase to look like an untrustworthy bad actor.” Another user added, “The SEC objects because their mission is to destroy the everyday US investor, not to protect them.”
Another update on Celsius’ plan supplement is the change of its assigned board of directors. Michael Arrington, founder of investment firm Arrington Capital, recently stepped down from the board. His partner at Fahrenheit, a consortium that won Celsius assets at a bankruptcy auction, will take the seat.
Arrington didn’t share the specific reasons for his departure but stated that he disagreed with the decisions made around the board constitution and “in particular, the board observers.” However, Arrington said, apart from not joining the board, their investment and active advisory role via Fahrenheit will go on as planned.