Coinbase CEO Cuts Ties Over SEC Hiring

Coinbase CEO Brian Armstrong has made a bold move, announcing that the cryptocurrency exchange has cut ties with law firms employing former U.S. Securities and Exchange Commission (SEC) officials. Armstrong accuses these individuals of orchestrating a campaign to “unlawfully kill” the crypto industry.

In a statement on X (formerly Twitter) on Monday, Armstrong clarified Coinbase’s position: “We’ve let all the law firms we work with know that if they hire anyone who committed these bad deeds in the (soon to be) prior administration, we will no longer be a client of theirs.”

The Fallout with Milbank

The Hiring That Crossed the Line

Armstrong singled out Milbank, a global law firm headquartered in New York, for hiring Gurbir Grewal, the SEC’s former head of the Division of Enforcement. During his tenure, Grewal oversaw an unprecedented surge in regulatory actions against crypto firms, including lawsuits against Coinbase and Binance.

“Milbank recently messed up and hired Gurbir. We don’t work with them now (and never will while he works there),” Armstrong stated emphatically.

Ethics and Overreach

Armstrong accused Grewal and the SEC of overreach, highlighting the lack of clear rules for the crypto industry. “It’s an ethics violation in my book to try and unlawfully kill an industry while refusing to publish clear rules,” Armstrong said, emphasizing that senior officials like Grewal had the option to leave the SEC rather than pursue aggressive enforcement actions.

A Call to Action for the Crypto Community

Armstrong urged the crypto community to take a similar stance, asking firms to let their legal partners know that hiring individuals involved in anti-crypto actions would result in the loss of their business.

“Let your law firms know that hiring these folks means losing you as a client,” Armstrong wrote, framing this as a necessary step to protect the industry’s future.

Leadership Shifts at the SEC

Armstrong’s comments come at a time of significant change within the SEC. Chair Gary Gensler, criticized for his enforcement-heavy approach to crypto regulation, has announced his resignation, effective January 20, 2025. SEC Commissioner Jaime Lizárraga also announced his resignation, effective January 17, 2025, citing personal reasons.

These leadership exits present a potential turning point for the agency, as President-elect Donald Trump will have the opportunity to appoint new members to the SEC. With bipartisan rules requiring at least one Democratic commissioner, Trump’s appointments could signal a more pro-crypto direction for the agency.

The Road Ahead

Armstrong’s firm stance against law firms hiring anti-crypto SEC officials reflects the growing tensions between the industry and regulators. As the SEC prepares for a leadership overhaul, the crypto sector remains hopeful for clearer rules and a less adversarial regulatory approach.

For Coinbase and its CEO, the message is clear: the crypto industry will no longer support those who they believe have worked to stifle its growth.