Coinbase’s Chief Legal Officer Clears The Air About The Company’s Crypto Ratings Council
Coinbase, a leading crypto-based company offering exchange and digital wallet services in the US has come out to answer concerns regarding its newly established Crypto Ratings Council. The company’s Chief Legal Officer, Brian Brook, responded to questions that the new service could be marred with conflicts of interest, The Block reports.
In an interview with the media outlet dedicated to crypto-related aspects, Brooks came out to tackle concerns that the compliance guidelines being used by the new Council is susceptible to manipulation by the private stakeholders involved in various projects.
Previously, the exchange has stated that the evaluations given by the Council are meant to be ‘scalable, points-based rating system’ that will be in accordance with the guidance issued by the U.S. Securities and Exchange Commission (SEC) for the purposes of classification.
Brooks sought to clarify that the ratings given by the Council should not be taken to be legal advice. He explained it will only be an automated compliance tool just like there are others in the financial sector. He went ahead to say that any guidance provided by these tools does not amount to legal advice. The Council will not be involved in rating the quality aspects or value of the assets but just their status either as a security or not.
Since the Council was established, there have numerous concerns by industry players like Tyler Gellasch, the executive director of Healthy Markets as well as Kara M. Stein a former counsel at SEC. Brooks explained that some Council members may own some stakes in assets being evaluated which might compromise their assessment but this should not be in any way persuasive to both investors and regulators.
Critics of the Council Gellasch have stated that it is not supported by the SEC, CFTC or any other agencies and investors could be duped into a project due to the ratings only to find out later that the SEC has a different opinion from that of the Council.
However, Brooks explained that the Council will aim at enhancing clarity and not only justifying assets that end up being deemed as unregistered securities.