Coinbase’s chief legal officer has requested that the SEC make revisions to its RIA custody rule that will protect all asset classes, including cryptocurrencies.

Coinbase chief of law Paul Grewal has asked the U.S. Securities and Exchange Commission (SEC) to make several revisions to the proposed regulation regarding the responsibilities of registered investment advisors (RIA) to hold client assets with qualified custodians. While the SEC recognizes Coinbase Custody as a qualified custodian, Coinbase claims that the updated RIA custodian rule unfairly targets crypto.

Grewal Calls for Regulation Revision

According to the document posted by Paul Grewal on May 9, the proposed SEC regulation fails to protect other asset classes such as cryptocurrencies.

Coinbase owns the Coinbase Custody Trust Company, which is recognized as a qualified custodian for RIA customers. Coinbase Custody is responsible for protecting client assets from potential threats such as bankruptcy and cyber attacks.

The document that Grewal posted advocates expanding the proposal for custody obligations to ensure it remains adaptable to future investments and protects them appropriately.

In the letter addressed to the SEC, Grewal called for a revision of the proposal and staff guidance, emphasizing the need to protect all asset classes, including crypto assets that have hitherto not been classified as securities.

The SEC is expected to comply with the court order and respond to the document sent by Coinbase this week. Coinbase filed a lawsuit in April 2022, demanding that the court compel the SEC to publicly disclose its stance on the petition filed several months ago.