WEBVTT - Coinbase Chief Legal Officer Paul Grewal Talks Crypto Regulation

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. We are now joined

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<v Speaker 1>by the firm's chief legal officer, Paul Greywall. And you know, Paul,

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<v Speaker 1>we really do have a sense here of the new

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<v Speaker 1>strategy by former President Trump into his presidential candidacy here

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<v Speaker 1>or the bid he's putting in, But we don't know

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<v Speaker 1>much about the Harris campaign. But you have been, from

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<v Speaker 1>what I understand, more in touch with that side of

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<v Speaker 1>the election here.

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<v Speaker 2>What do they say, Well, good morning. We've been in

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<v Speaker 2>touch with both sides, both the Trump campaign and the

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<v Speaker 2>Harris campaign, as they develop their crypto policies and begin

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<v Speaker 2>engaging with the crypto voter. And I will say that,

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<v Speaker 2>certainly the Trump campaign has been more explicit in embracing specific,

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<v Speaker 2>concrete proposals for crypto and digital assets more generally. But

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<v Speaker 2>we've been encouraged that even as the current administration and

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<v Speaker 2>under Gary Gensler, continues with its campaign of regulation by enforcement,

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<v Speaker 2>the Harris campaign, which of course stands separate from the administration,

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<v Speaker 2>has reached out, has expressed an interest and has begun

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<v Speaker 2>discussions about what a new approach to crypto and digital

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<v Speaker 2>assets could look like.

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<v Speaker 1>That's fascinating, and what does it mean for the people

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<v Speaker 1>she might have at the top. You mentioned Gary Gensler here,

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<v Speaker 1>but under a potential future Kamala Harris presidency, you might

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<v Speaker 1>have different leaders when it comes to regulation. What did

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<v Speaker 1>she say?

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<v Speaker 2>We almost certainly will have a different leaders emerged, And

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<v Speaker 2>of course a top of mind for any of us

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<v Speaker 2>in the crypto industry is the SEC. But there are

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<v Speaker 2>a number of agencies in the federal government which will

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<v Speaker 2>play an important role in the development and evolution of

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<v Speaker 2>this industry. What we're hearing is that there still remains,

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<v Speaker 2>i think, an open mind to a new approach to crypto.

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<v Speaker 2>We think the most important new approach is embodied in

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<v Speaker 2>legislation which has passed the House. That's, of course, the

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<v Speaker 2>FIT twenty one Bill, which provides for market structure for

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<v Speaker 2>crypto and important investor and consumer protections. And that legislation

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<v Speaker 2>is now being considered by the Senate. And so we expect,

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<v Speaker 2>even as the presidential campaign roars ahead, we're going to

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<v Speaker 2>see progress in the fall on that legislation and hopefully

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<v Speaker 2>and embraced by both parties of the structure and certainty

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<v Speaker 2>it would provide.

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<v Speaker 1>Paul.

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<v Speaker 3>Let's talk about Congress a little bit too, I know

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<v Speaker 3>coinbase has been funding fairshake the pack, which is really

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<v Speaker 3>laser focused on House and Senate races rather than the

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<v Speaker 3>presidential race. Should the industry get a very pro crypto

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<v Speaker 3>Congress in twenty twenty five? Is that legislation that passed

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<v Speaker 3>the House still sort of you know what you would

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<v Speaker 3>like to see pasted or is there room for a

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<v Speaker 3>whole new bill that's perhaps even a little bit more

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<v Speaker 3>friendly to the industry. Should you get that congressional outcome

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<v Speaker 3>that you're looking for.

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<v Speaker 2>Well, no legislation is perfect, and FIT twenty one is

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<v Speaker 2>no exception to that. But it's a strong bill which

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<v Speaker 2>includes the most critical protections from our constructure, and I

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<v Speaker 2>think there's no question about it. We are going to

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<v Speaker 2>see a pro crypto Congress emerged, regardless of the particular

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<v Speaker 2>outcome in individual races, and of course the outcome in

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<v Speaker 2>the presidential race. We've seen evidence of this. Seventy one

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<v Speaker 2>Democrats joined with almost every Republican in the House in

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<v Speaker 2>supporting FIT twenty one, and we're now seeing Democrats in

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<v Speaker 2>the Senate, whether it's Senator jillibrand whether it's others on

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<v Speaker 2>the Senate Banking Committee, express a real interest in moving

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<v Speaker 2>forward to that legislation, Senator Stabnow, of course in the

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<v Speaker 2>Agricultural Committee, we're just pleased to see now members of

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<v Speaker 2>both houses and on both sides of the aisle understand

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<v Speaker 2>that fifty million Americans or more who have bought or

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<v Speaker 2>sold a digital asset are expecting the Congress to do

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<v Speaker 2>its job.

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<v Speaker 3>Yeah, Paul, I think one of the fascinating things about

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<v Speaker 3>crypto when you think of crypto and regulation is the

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<v Speaker 3>innovation in crypto is often sort of one or two

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<v Speaker 3>steps ahead of the regulators what they're thinking about. So

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<v Speaker 3>I'm curious how you think about that when you think

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<v Speaker 3>of this legislation that's on the table, and when you

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<v Speaker 3>think of coinbas as business, you know, an exchange company

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<v Speaker 3>at heart, but you're also expanding out into a blockchain

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<v Speaker 3>project with base. You know, is it possible to sort

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<v Speaker 3>of future you know, make legislation that is future proof

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<v Speaker 3>that considers all the different areas that crypto can get

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<v Speaker 3>into and not have to be coming back to the

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<v Speaker 3>question of is this legal or not? In the industry,

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<v Speaker 3>you know, how do you think about that future when

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<v Speaker 3>it comes to regulation.

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<v Speaker 2>Well, it's very interesting is that while the innovation almost

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<v Speaker 2>always does race ahead of the current state of the law.

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<v Speaker 2>It hasn't raced ahead of the sentiment among millions of

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<v Speaker 2>Americans that they want to see digital assets, cryptocurrencies, other

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<v Speaker 2>blockchage based technologies as part of their financial future. One

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<v Speaker 2>of the virtues of the pending legislation is that it

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<v Speaker 2>would call for additional rule making bye bye by the

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<v Speaker 2>regulator and appropriate agencies to fill in the gaps, to

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<v Speaker 2>write in the details that are going to evolve over time.

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<v Speaker 2>But it will provide a durable framework that will last

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<v Speaker 2>far longer than any one particular administration, any one particular Congress,

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<v Speaker 2>or certainly any one particular chair of the SEC or

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<v Speaker 2>any other agency.

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<v Speaker 1>It's interesting because we talk about all the players in

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<v Speaker 1>Washington here that are needed really to change the tone,

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<v Speaker 1>and Congress is a big, big part of that. You've

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<v Speaker 1>been spending a lot of time in Ohio, as I

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<v Speaker 1>understand it, and it's really interesting Ohio. Of course, you

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<v Speaker 1>have a senator that has very long been a very

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<v Speaker 1>vocal point of that sentiment. Banking Committee really the committee

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<v Speaker 1>here that has a very close relationship to the SEC

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<v Speaker 1>and its own oversight. How does Ohio change the game?

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<v Speaker 2>Well, as an Ohio native. I certainly pay a lot

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<v Speaker 2>of attention to my home state, but putting that aside,

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<v Speaker 2>Ohio is I think a critical battleground for the future

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<v Speaker 2>of crypto and the future of le sustainable crypto legislation.

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<v Speaker 2>Senator Brown has expressed deep skepticism in the past about

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<v Speaker 2>the digital assets and cryptocurrencies, and yet we're seeing a

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<v Speaker 2>real conversation around crypto take place in his race against

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<v Speaker 2>Bernie Marino. And I think that for either of these candidates,

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<v Speaker 2>it's going to be critical to pay attention to the

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<v Speaker 2>over one million Ohioans who have now bought and sold

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<v Speaker 2>cryptocurrencies or digital assets, and the tens of thousands who

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<v Speaker 2>have signed up as advocates with stand with Crypto, the

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<v Speaker 2>people who have said we want to have a crypto

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<v Speaker 2>dialogue in the political dialogue, and we're going to vote

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<v Speaker 2>on this issue. So I think for both Senator Brown

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<v Speaker 2>and for mister Marino, it's going to be critical to

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<v Speaker 2>pay attention to what their voters want.

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<v Speaker 3>Paul quickly, you know, we started off this segment with

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<v Speaker 3>that quote from Donald Trump promising to fire Gary Gensler.

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<v Speaker 3>I'm wondering if that happens. Are there any names sort

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<v Speaker 3>of floating around in your circle of who you'd like

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<v Speaker 3>to see you get that job.

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<v Speaker 2>Well, there are certainly all sorts of names that have

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<v Speaker 2>been floated. We don't have a particular view on those.

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<v Speaker 2>Which of those individuals might make the best SEC chair.

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<v Speaker 2>I think regardless of particular names or particular individuals, what's

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<v Speaker 2>criticals that we have an administration that is committed to

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<v Speaker 2>sensible rules for crypto and that in nominating someone as

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<v Speaker 2>chair of the SEC, or in confirming someone on behalf

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<v Speaker 2>of the Senate Banking Committee, that their views on crypto

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<v Speaker 2>be a critical part of the conversation, and that they're

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<v Speaker 2>understanding that crypto needs to be part of our financial

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<v Speaker 2>future be a critical criteria.

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<v Speaker 1>Really quickly here, Paul, do you think that if there's

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<v Speaker 1>a change in administration and a change in the SEC chair,

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<v Speaker 1>that the suits that the SEC have made against you

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<v Speaker 1>the nature could change.

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<v Speaker 2>Well, regardless of whether or not there is any change

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<v Speaker 2>of view at the SEC as a result of a

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<v Speaker 2>change in administration, we're prepared to litigate. We're prepared to

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<v Speaker 2>win that case in court. We're confident that the courts

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<v Speaker 2>are going to see this our way, and so we

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<v Speaker 2>are absolutely laser focused on that outcome, but certainly with

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<v Speaker 2>a change in administration will come the opportunity for a

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<v Speaker 2>new SEC chair and a new Commission as a whole

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<v Speaker 2>to reconsider whether this is the right way to regulate

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<v Speaker 2>this important emerging asset class and technology. It certainly stands

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<v Speaker 2>in start contrast to what we're seeing in Europe and

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<v Speaker 2>all over the world, where there's a much more sensible,

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<v Speaker 2>pragmatic and still tough approach being taken that focuses on

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<v Speaker 2>legislation not litigation. Is the answer, Paul.

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<v Speaker 1>Absolutely fascinating to talk to you at this moment. That is,

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<v Speaker 1>coinbased Chief Legal Officer, Paul Graywell