Coinbase CEO Warns Law Firms Against Hiring Former SEC Officials
This is a segment from the Forward Guidance newsletter.
Coinbase CEO's Stance on Legal Hires
Coinbase CEO Brian Armstrong's recent post on X addresses the hiring practices of law firms in relation to the crypto industry. He emphasized that Coinbase will terminate relationships with any firm employing individuals associated with prior administration “bad deeds.”
Context of Armstrong's Statement
Armstrong's remarks targeted Gurbir Grewal, former SEC enforcement division director, who joined Milbank LLP after leaving the SEC. Milbank noted that under Grewal, over 2,400 enforcement actions occurred, including more than 100 related to crypto compliance.
A representative from Milbank did not respond to inquiries regarding their relationship with Coinbase. It is clarified that Milbank has never worked with Coinbase. Additionally, McGuireWoods recently hired David Hirsch, ex-head of the SEC’s crypto assets and cyber unit, although the nature of Coinbase's dealings with that firm is unclear.
Industry Implications
Armstrong's post aims to foster discussion about the legal landscape affecting the crypto sector. Coinbase Chief Legal Officer Paul Grewal stated that many law firm leaders lack awareness of the crypto industry's challenges and the personal impact of SEC enforcement actions.
Grewal highlighted that the ongoing scrutiny felt like an "attack" on the industry. While companies have the autonomy to hire whom they choose, Coinbase also retains the right to select its partners.
The reaction to Armstrong's statement has been notable within legal circles, though its potential influence on future hiring decisions remains uncertain.