Coinbase has urged the U.S. Office of Government Ethics (OGE) to remove the rule prohibiting Securities and Exchange Commission (SEC) employees from owning cryptocurrencies. Paul Grewal, Coinbase’s Chief Legal Officer, emphasized that this ban is hindering the operations of the SEC’s Crypto Task Force.
In letters addressed to acting OGE Director Jamieson Greer and newly appointed SEC Chair Paul Atkins, Grewal argued: “To regulate technology, you first need to understand it, and to understand it, you need to use it.” He stressed that allowing SEC staff to engage with crypto assets is essential to developing practical and effective regulatory frameworks for digital assets.
According to Advisory 22-04, issued on July 4, 2022, the OGE prohibits SEC employees from trading or holding cryptocurrencies and stablecoins, as they are not classified as “publicly traded securities.” This prevents SEC staff from directly experiencing the very technologies they are tasked with regulating.
Grewal pointed out that President Donald Trump had instructed the SEC and other agencies to submit recommendations for crypto regulations within 90 days. Yet, SEC staff are still barred from using the technology they are expected to regulate.
In his letter to Chair Atkins and Commissioner Hester Peirce, Grewal suggested that the SEC should proactively issue waivers to members of the Crypto Task Force and other relevant personnel, rather than waiting for the OGE to amend its advisory. He emphasized that such waivers would be consistent with similar actions taken in other advisory contexts.
Grewal asserted that granting these waivers would enable SEC staff to better understand blockchain technology and cryptocurrencies, thereby allowing them to draft more realistic and effective regulations.
Previously, under the leadership of former SEC Chair Gary Gensler, the agency adopted a hardline stance against crypto, initiating over 100 enforcement actions against firms in the sector. However, following Gensler’s resignation in January 2025, the SEC has since scaled back its regulatory efforts, including dropping lawsuits against firms like Coinbase and, more recently, withdrawing its enforcement action against blockchain company Dragonchain.
