Former Coinbase Chief Legal Officer Paul Grewal: Some Companies Have Actively Sought Regulation and Won
Paul Grewal responded to Rahm Emanuel's claim that "no CEO or the entire industry has ever actively sought regulation." Grewal wrote that he remembers one CEO and one industry asking about it; he more clearly recalls one company that not only sought regulation but also sued after being pushed and won. Although unnamed, the history points to Coinbase.
Grewal served as Coinbase's Chief Legal Officer for about six years. In 2022, the company submitted a petition to the U.S. Securities and Exchange Commission (SEC) requesting the creation of rules specific to cryptocurrency; after delays from the agency, the company sued to compel a response and obtained a court order requiring the SEC to explain its actions, which faced criticism during the appeal for its thin explanations. In 2023, the SEC sued Coinbase for acting as an unregistered securities broker, clearing agency, and exchange. Grewal turned defense into offense: seeking internal documents and checking whether token classification standards are consistent. The case was withdrawn during Trump's presidency. He self-assessed it as "winning the biggest battle for the industry," later stepping down in July 2026 to become an advisor and participating in the legislative push for stablecoin GENIUS and market structure Clarity.
Emanuel's reference was to Dario Amodei's request for a narrow antitrust exemption to allow labs to coordinate safety and slow down the frontier. Grewal reframed "seeking regulation" from a moral astonishment into a verifiable litigation history: what is sought is an enforceable rule text, not enforcement as a substitute for legislation. Cryptocurrency and artificial intelligence are currently competing for the same vocabulary—actively seeking shackles—but Coinbase wants classification and registration pathways, while Amodei wants peers to discuss without being treated as a cartel.
The two approaches to seeking regulation are opposite. Exchanges seek clarity for listing and trading; labs seek exemptions to slow down together. Grewal's victory serves as a reminder: regulators can neither write rules nor prosecute, and companies can bring such gaps to court. Emanuel's "never" holds in Washington's oral history but does not hold in the Coinbase case files.
Mechanically, this is a struggle for regulatory narrative, not a new product. Buyers want to write "the industry seeks regulation" as a conscious safety faction; sellers want to write the same sentence as "what we want is rules, not sticks" for licensed exchanges. The beneficiaries are those who have turned petitions and lawsuits into templates for crypto lobbying; the pressured are the labs that directly send collaborative slowdowns to Congress and the old regulatory paths that still want to shape the market through enforcement. Funds flow along legislative texts: Clarity and safety exemptions are two different bills, and Grewal reminds that they should not be conflated.
Source: Public Information
ABAB AI Insight
Grewal's counterattack precision lies in his background. He is not a critic but someone who brought "please write rules first" into the courtroom. Emanuel, using his White House and congressional experience, claims no one has sought regulation, folding requests for licenses and exemptions into a political rhetoric. Coinbase seeks a compliant roadmap; after being denied, it sued over the absence of the roadmap. Winning, first and foremost, is about forcing explanations, and secondly, winning through the withdrawal of enforcement actions. Amodei's letter seeks a meeting of peers, which is closer to the room Smith worried about, rather than the registration forms that exchanges want.
The capital path is converting litigation budgets into rule rights. Petitions, forced responses, and evidence disclosures expose the SEC's internal standards to the market. After Trump took office, the case was withdrawn, tying legal victories to election cycles. When Grewal left, Clarity was still near Senate procedures, indicating that winning in court does not equal passing a bill. Resources shifted from Delaware to Texas, then from the courts to lobbying. The AI labs replicate the PR phrase "we have sought regulation," not the case number "we have sued regulators."
A similar structure is Uber operating first and then seeking a license, and banks proactively requesting stress tests after crises—the latter is closer to what Grewal describes as winning. The industry phase belongs to control: crypto wants market structure laws, AI wants safety coordination exemptions. If the two texts are heard by the public as the same thing, labs will borrow the moral light of exchanges, and exchanges will bear the cartel suspicion of labs.
The structural judgment is regulatory change. The mechanism is that "seeking regulation" can mean wanting chains or wanting keys. Chains restrict newcomers, while keys open compliance pathways for oneself. Whoever first writes this phrase into mainstream discourse temporarily defines the motive. Court records are harder than discourse: petition dates, victory orders, and withdrawal times can all be challenged.
ABAB News · Cognitive Laws
Seeking regulation can sometimes mean seeking a compliant key.
Not writing rules but prosecuting can bring gaps to court.
Those who actively seek shackles must first clarify who the shackles are around.