Coinbase's chief legal officer, Paul Grewal, has criticized the US Securities and Exchange Commission (SEC) for deviating from its own procedures in a legal dispute. Grewal pointed out that the SEC failed to follow its typical Wells notice process, which provides a thorough explanation of the evidence used to prove potential charges. This omission is a significant flaw in the SEC's enforcement action against Coinbase.

The SEC sued Coinbase in June last year for allegedly engaging in unregistered securities transactions since 2019. Despite this, Coinbase received no clear explanation of the evidence or which assets were at issue. Grewal questions why the government would deviate from its typical process and what this says about its claims.

This legal dispute is part of a larger controversy surrounding the SEC's enforcement actions against crypto companies. Critics argue that the SEC is abusing its power and attacking good actors instead of establishing clearer rules for the industry. Recently, a federal district court judge criticized the SEC for a "gross abuse" of power in a similar case against Debt Box. Two SEC attorneys leading the case have since resigned.

The crypto community is pushing back against the SEC's actions, with some calling it a "carpet bombing campaign" against crypto. Uniswap's founder, Hayden Adams, has lambasted the SEC for targeting good actors instead of establishing clearer rules. The SEC has not responded to requests for comment.