Cryptocurrency Exchange Coinbase Appoints Paul D. Clement to Aid in Legal Battles

On Wednesday, July 24, 2024, cryptocurrency exchange Coinbase Inc. announced the addition of three new members to its board of directors, including prominent lawyer Paul D. Clement. Coinbase says the appointments will help the company in its ongoing regulatory battles.

Clement, a former U.S. solicitor general, is joining the Coinbase board along with Chris Lehane, vice president of public works at OpenAI, and Christa Davies, chief financial officer at Aon. Coinbase pointed to Clement’s role in convincing the US Supreme Court to eliminate the Chevron deference standard as particularly valuable.

Under the previous Chevron standard, established in 1984, judges were required to defer to federal agency interpretations of ambiguous laws. In a recent landmark case, Loper Bright v. Raimondo, the Supreme Court did away with this standard, saying it gave too much power to regulators. Coinbase believes this ruling will help curb overreach from agencies like the SEC.

As a member of Coinbase’s audit and compliance committee, Clement will advise the company in its ongoing legal fights against the SEC. The regulator claims Coinbase operated as an unregistered securities exchange and broker by listing tokens they see as securities. However, Coinbase argues the SEC has failed to identify any specific tokens it believes violated securities law.

Clement joins Coinbase at a pivotal time as it is pushing for access to SEC Chair Gary Gensler’s private communications. Coinbase believes these communications could show Gensler took a broader view of crypto publicly than he acknowledged privately. The company is also still fighting the SEC’s allegations in court.

With over 100 Supreme Court arguments, Clement brings extensive legal experience that Coinbase hopes will help navigate complex regulatory issues in crypto. As a partner at Clement & Murphy PLLC, his practice focuses on appeals involving administrative law and financial sectors.

In addition to his solicitor general tenure, Clement represented fishing industry plaintiffs in the Loper Bright case challenging costs imposed by the National Marine Fisheries Service. Coinbase clearly sees his regulatory and litigation background as valuable assets as it contends with SEC action.