Coinbase’s Paul Grewal Urges SEC to Rethink Crypto Ban on Employees

Coinbase’s chief legal officer, Paul Grewal, has called for major reforms in SEC crypto regulation. He urged the U.S. Office of Government Ethics to remove the SEC crypto ban on holding digital assets. Grewal argues that practical experience with crypto is essential for crafting fair and effective regulations. He highlights the Trump administration’s push for rapid crypto rulemaking. His appeal includes issuing ethics waivers to knowledgeable staff. He also warns of the broader impacts of the SEC’s restrictive crypto policies.

Does the SEC Staff Crypto Ban Create Knowledge Gaps?

Coinbase Paul Grewal posted letters to OGE’s Jamieson Greer and SEC Chair Paul Atkins on X. He argued that SEC employees need permission to own and use cryptocurrencies to understand their regulation. He insisted that proper regulation requires firsthand knowledge of digital assets. Grewal said sensible SEC frameworks need staff to experience how digital assets function in real scenarios.

I never understood why @SECGov employees are barred from holding or using digital assets. Any potential conflicts can easily be managed. So I wrote to ask that @OfficeGovEthics rescind and update Legal Advisory 22-04 and for the Crypto Task Force to issue waivers—now. pic.twitter.com/vdG9veuqPY

— paulgrewal.eth (@iampaulgrewal) April 25, 2025

He also argues the SEC crypto ban hinders the agency’s ability to craft practical, intelligent crypto regulations. In 2022, the Office of Government Ethics’ Legal Advisory 22-04 bars SEC employees from holding crypto, as it’s not traded. He highlights permitted stock and bond holdings contrast with banned crypto, causing key knowledge gaps as digital assets grow central. He urged leadership to rethink this prohibition without delay.

Can Practical Blockchain Experience Improve the Regulations?

A tight White House-imposed timeline is further complicating these regulatory efforts. Donald Trump directed agencies, including the SEC, to propose and draft new crypto rules within 90 days. That strict deadline is placing regulators under intense time pressure to act swiftly. Coinbase Paul Grewal says that SEC staff face a major disadvantage without direct blockchain interaction. He believes real comprehension demands more than second-hand research. Hands-on engagement with crypto products and core technologies is essential for informed oversight. Effective regulation requires practical experience to keep pace with this fast-evolving sector.

Some experts in finance and crypto deem the SEC crypto ban on agency staff excessive and misaligned. Ji Kim of the Crypto Council for Innovation compared it to forbidding Federal Reserve staff from holding U.S. dollars. Observers warn that such strict rules disconnect regulators from the technology they oversee. Even supporters of ethical safeguards agree that hands-on knowledge is essential for effective regulation. This debate mirrors broader discussions on regulatory familiarity with emerging technologies. Coinbase chief legal officer Coinbase Paul Grewal, emphasizes that regulators require direct crypto experience to draft informed policies.

Can Strict Crypto Rules Help Maintain Public Trust in Regulators?

Advocates argue the SEC crypto ban prevents conflicts of interest, insider trading, and other serious ethical risks. They contend regulators require firm boundaries to maintain public trust in digital asset oversight. However, the shifting landscape could prompt the Office of Government Ethics to rescind this rule. Other federal agencies have already rolled back anti-crypto policies in recent months. Notably, the Federal Reserve withdrew its guidance requiring banks to seek approval for crypto services. This is in line with the beliefs of Coinbase chief legal officer, Paul Grewal, and the new SEC Chair.

How Will Closing the Knowledge Gap Shape the Future?

The United States needs fair crypto rules supported by deep SEC expertise. Coinbase Paul Grewal argues that regulators must first learn what they regulate. He suggests ditching outdated ethics guidelines and issuing targeted exemptions to avoid an SEC crypto ban. Quick action is essential because the crypto industry evolves rapidly. Meanwhile, Donald Trump presses for swift regulatory proposals to guide this growth. Lawmakers must grasp blockchain and digital assets technology to craft effective financial policies. As such, bridging these knowledge gaps will shape the future of crypto regulation in America.