Dec 3 (Reuters) - Coinbase's CEO and its top lawyer

threatened to withhold business from law firms that hire senior

U.S. Securities and Exchange Commission attorneys, claiming they

harmed the cryptocurrency industry during the Biden

administration.

Coinbase CEO Brian Armstrong said in a Monday

social media post on X that the company "let all the law firms

we work with know, that if they hire anyone who committed these

bad deeds in the (soon to be) prior administration, we will no

longer be a client of theirs."

Paul Grewal, Coinbase's chief legal officer, told Reuters in

an interview on Tuesday that law firms that work or hope to work

for Coinbase already sent him "a number of assurances" that they

understood the company's message.

The SEC in June 2023 sued Binance and Coinbase, two of the

world's largest crypto exchanges, for allegedly breaking rules

on registering securities. The companies denied the claims, part

of a crypto crackdown that gathered pace under Democratic

leadership.

Coinbase petitioned the SEC to clarify its crypto rules, and

the industry is now pushing for policies that would promote

digital assets as it anticipates a cryptocurrency-friendly

regime under Republican President-elect Donald Trump.

Armstrong in his post on X singled out U.S. law firm Milbank

and its recent hire of Gurbir Grewal, former director of the

SEC's enforcement division, whose tenure was marked by

stepped-up scrutiny of cryptocurrency firms.

Armstrong said Coinbase does not work with Milbank and will

not while Grewal is at the firm.

"It's an ethics violation in my book to try and unlawfully

kill an industry while refusing to publish clear rules,"

Armstrong said of the SEC. "If you were senior there, you cannot

say you were just following orders."

Milbank did not immediately respond to a request for comment

on Armstrong's comments on Tuesday. The ex-SEC official Grewal

has rejected criticism of the regulator's cryptocurrency

policies. The SEC did not immediately respond to a request for

comment.

Coinbase tapped lawyers from Wachtell, Lipton, Rosen & Katz

and Sullivan & Cromwell to fight the SEC lawsuit.

Representatives from the firms did not immediately respond to

requests for comment.

Another prominent firm that has represented Coinbase for

deals and litigation, Latham & Watkins, also did not immediately

respond to a request for comment.

Other companies have also attempted to police their law

firms' hires. The Wall Street Journal reported that Tesla

pressed law firm Cooley in 2021 to fire a former SEC

attorney who had interviewed Tesla CEO Elon Musk as part of a

federal securities probe. Cooley refused, according to the

report, which Reuters could not independently verify.

Coinbase's Grewal on Tuesday predicted that more companies

would start to question the "assumption by many government

attorneys that they are free and clear to do whatever they want

while in office without any consequences once they leave."