Paul Grewal, the Chief Legal Officer at Coinbase (NASDAQ:COIN), says that it’s the US Congress’ job to make the laws and set the regulatory boundaries “for each of our federal agencies.”
Paul Grewal from Coinbase points out that the CFPB is no exception, and recently the firm claims that it had “no choice but to make this point.”
Recently, Coinbase shared their concerns with the Consumer Financial Protection Bureau’s sweeping proposal to “define and regulate general-use consumer payment apps, which attempts to lump crypto assets into its purview without sufficient research or understanding of crypto transactions, and without a clear argument as to the agency’s legal authority to regulate the market.”
As noted by Grewal via LinkedIn, CFPB has “not been granted authority by Congress to assert jurisdiction over the digital asset industry and any attempt to do so would violate the Major Questions Doctrine.”
Instead of front-running Congress to grab “a piece of the regulatory pie, federal agencies ought to let Congress do its job by establishing a clear regulatory framework for crypto.”
The update noted:
“We support the CFPB’s statutory objectives that help ensure consumers have access to markets for consumer financial products and services that are fair, transparent, and competitive. Coinbase started in 2012 with these core objectives in mind and, today, millions of verified users around the world rely on our trusted and easy-to-use platform to access the growing crypto economy.”
The letter from global digital asset firm Coinbase also mentioned that the CFPB has “never formally sought or been given, and currently lacks, the authority over crypto-assets that it asserts in the Proposed Rule.”
The update from Coinbase further noted that neither in the Proposed Rule nor elsewhere “has the CFPB substantiated its claim of supervisory authority. And the CFPB has not developed a record on which it could reasonably evaluate whether to assert such authority over crypto-asset transactions.”
As stated in the letter by Coinbase, to the extent “that the CFPB continues to “believe” that the Proposed Rule should include crypto-assets, the rulemaking process and record “must be revisited.”
Therefore, Coinbase urges the CFPB to:
Substantiate its rulemaking record “with analysis of its legal authority to include crypto- assets in the scope of the Proposed Rule and the supervisory basis to subject crypto-asset transactions to CFPB supervision.”
This analysis should then be “the foundation for application of the defined market to crypto-asset transactions.”
In order to make an informed assessment of consumer protection risks “presented by crypto-asset transactions, the CFPB also should conduct outreach to companies in the crypto-asset industry to understand the products and services made available to consumers, the risks posed to consumers and the protective measures and controls implemented to enhance consumer protection.”
You can read the firm’s full comment letter here.
