Paul Grewal, the Chief Legal Officer (CLO) at American crypto giant Coinbase, recently questioned the Securities and Exchange Commission’s (SEC) objection to the crypto exchange’s deal with Celsius Network. Celsius, which recently presented its bankruptcy plan, had tapped Coinbase to act as a distribution agent for its international customers.
Grewal recently took to X (formerly Twitter) to seek clarification from the SEC over its objection to Coinbase’s deal with Celsius:
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
On May 25, a consortium of investors (Fahrenheit LLC) led by Michael Arrington’s Arrington Capital won the bid for Celsius’ assets. The investors included Coinbase, US Bitcoin Corp, Algorand’s former CEO Steven Kokinos, and investment banker Ravi Kaza. Coinbase was subsequently tapped to provide brokerage and master trading services to the defunct crypto lender.
Last week, the SEC filed its objection to Coinbase’s involvement in Celsius’ bankruptcy plan. According to the filing made in the U.S. Bankruptcy Court for the Southern District of New York, the securities regulator cited inconsistency with Celsius’ bankruptcy plan and raised concerns under the federal securities laws.
The SEC stated that the agreement between Coinbase and Celsius went beyond the former providing the services of a distribution agent, contemplating brokerage services, and master trading services. The securities regulator added that Coinbase would engage in activities that it was already under legal scrutiny for as part of SEC v Coinbase.
Addressing the SEC’s objection, Coinbase’s Grewal responded:
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 Celsius customers whole.
Following the latest developments, Arrington announced that he would step down from the board of directors of Celsius’ new entity. Ravi Kaza, Arrington’s partner at Fahrenheit, would reportedly take over the vacated board seat.
