Coinbase’s Grewal scrutinizes US GAO’s report on crypto’s role in sanctions evasion

Coinbase CLO Paul Grewal slammed the U.S. GAO’s crypto report as ‘shoddy work,’ accusing it of sensationalizing crypto’s role in sanctions evasion.

Coinbase‘s Chief Legal Officer Paul Grewal has publicly criticized the U.S. Government Accountability Office’s (GAO) recent crypto report, accusing it of clickbaiting the topic of crypto usage in sanctions evasion. Grewal, who joined Coinbase in 2020, highlighted in an X thread several shortcomings in the GAO’s analysis and questioned the taxpayer funds allocated to what he called “shoddy work.”

Zero comparative analysis performed. Heck, zero analysis whatsoever performed. Instead they harangue an industry that spends millions and millions to follow the law. Ask yourself— why? https://t.co/a7VKV0vKR4

— paulgrewal.eth (@iampaulgrewal) January 22, 2024

The Coinbase CLO particularly expressed dissatisfaction with the GAO’s approach, stating, “zero comparative analysis performed. Heck, zero analysis whatsoever performed.” Grewal also questioned the GAO’s decision to criticize the crypto industry, given that it spends “millions and millions to follow the law.”

Further criticizing the GAO’s findings, Grewal pointed out that buried within the report, beneath what he referred to as “clickbait,” were admissions that cryptocurrencies are, in fact, an ineffective means to circumvent sanctions. This contradiction, according to Grewal, raises concerns about the reliability and thoroughness of the GAO’s report.

“This would be merely embarrassing for taxpayers but for the fact that taxpayers have funded this shoddy work. That’s the smell of the people’s money being burned.”

Paul Grewal

The U.S. GAO’s recent 63-page report on crypto raises concerns that digital assets can be used as a tool to evade economic sanctions. The report particularly notes that assets like Bitcoin (BTC) can be used by sanctioned entities to “hide their transactions.”

While the report highlights the challenges faced by federal agencies in monitoring and enforcing sanctions in the evolving landscape of cryptocurrency use, it also concludes that “many digital assets are recorded on a public ledger, which may enable U.S. agencies and analytics firms to trace transactions and potentially identify illicit actors.”