Coinbase is pressing the U.S. Office of Government Ethics (OGE) and Securities and Exchange Commission (SEC) leadership to overturn a longstanding rule that bars SEC employees from owning or using cryptocurrencies—a policy it argues is obstructing the agency’s effectiveness.
In an open letter dated April 25, Coinbase Chief Legal Officer Paul Grewal called on newly appointed SEC Chair Paul Atkins and OGE Acting Director Jamieson Greer to reconsider the controversial rule that has kept SEC personnel from participating in crypto markets.
Grewal argued that direct experience with digital assets is crucial if regulators are to craft informed, functional rules for the sector.
“To regulate technology, you need to understand it. To understand technology, you need to use it,” he wrote.
The letter emphasized that permitting SEC staff to hold and interact with crypto would equip them with real-world insights essential for building practical frameworks for digital asset oversight.
The ban traces back to Legal Advisory 22-04, issued by the OGE in July 2022. It prohibits SEC employees from buying, selling, or using cryptocurrencies and stablecoins, based on the classification that these assets are not “publicly traded securities” and thus do not qualify for ownership exceptions typically afforded to stocks.
Coinbase contends that this outdated policy is no longer fit for the rapidly evolving digital economy, especially as crypto adoption spreads across global finance.
Crypto Ban Hindering SEC’s Progress, Coinbase Says
In a second letter addressed to SEC Chair Paul Atkins and Commissioner Hester Peirce, Grewal argued that prohibiting SEC employees from engaging with crypto assets is creating a major obstacle for the agency’s Crypto Task Force.
Grewal pointed out that U.S. President Donald Trump recently directed the SEC and other federal agencies to deliver comprehensive crypto regulatory recommendations within 90 days—a deadline that is fast approaching. Yet ironically, SEC staff are still unable to interact directly with crypto markets, he noted.
While the authority to rescind the crypto ban ultimately rests with the Office of Government Ethics, Grewal emphasized that the SEC could take interim action by issuing waivers to members of its Crypto Task Force and other staff involved in crafting digital asset policy.
“For example, issuing waivers to crypto task force members and other staff actively working on task force matters would be consistent with measures already taken in commensurate advisory situations,” Grewal explained.
He added that allowing SEC personnel to engage firsthand with cryptocurrencies would significantly enhance their ability to understand the technology, improving the quality and practicality of forthcoming regulations.
SEC’s New Leadership Faces Pressure for Reform
The appeal to roll back the crypto ownership ban comes at a pivotal moment for the agency. SEC Chair Paul Atkins has taken a more open stance toward digital assets compared to his predecessor, Gary Gensler. Since Atkins’ appointment, the SEC has dropped several crypto-related lawsuits and moved toward engaging the industry through dedicated task forces and public forums.
Coinbase’s letter underscores growing calls within both the crypto community and traditional finance firms for a regulatory framework that bridges innovation with consumer protection—rather than stifling emerging technologies through outdated restrictions.
As deadlines for crypto regulatory proposals loom, the pressure on SEC leadership to modernize its internal policies continues to mount.
Quick Facts
- Coinbase submitted a formal letter urging the SEC to allow staff to hold and use cryptocurrencies.
- The current ban traces back to Legal Advisory 22-04, implemented in 2022 amid conflict of interest concerns.
- Coinbase argues that crypto’s mainstream evolution demands updated internal policies for regulators.
- SEC Chair Paul Atkins has voiced support for a more balanced and innovation-friendly approach to digital asset regulation.
