- Brian Armstrong, CEO of Coinbase, remains unwavering in face of the new lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against his exchange.
- Armstrong advocates for better regulatory clarity around cryptocurrency rules and believes this court battle with the SEC could pave the way.
Brian Armstrong, the stalwart CEO of Coinbase, is undeterred by the latest lawsuit brought against his exchange by the U.S. Securities and Exchange Commission (SEC). On Monday, he, along with his organization, gave concise statements regarding their confidence in overcoming this legal hurdle imposed by the regulatory body.
If it wasn’t already clear, it should be now – Chair Gensler’s laughable “pro-innovation” stance (as he said today), is exactly the opposite. What this also tells me is that the SEC is throwing lawsuits at the wall and hoping they distract from the agency’s FTX debacle.
— Brad Garlinghouse (@bgarlinghouse) June 6, 2023
In a recent tweet, Armstrong expressed that Coinbase stands “proud” in representing the crypto sector in this SEC lawsuit. He asserted the necessity of this legal confrontation to illuminate the ambiguity surrounding cryptocurrency regulations.
They didn't sue FTX. https://t.co/FVgi5l6VcI
— CZ 🔶 Binance (@cz_binance) June 6, 2023
For years, Armstrong has been vocal about the SEC’s lack of clarity on how securities laws intersect with the cryptocurrency sector. He specifically pointed out the unresolved issues around the classification of digital assets – which ones are securities, and which ones are commodities. Back in April, Coinbase legally challenged the SEC for its non-responsiveness to the exchange’s appeal for a rulebook on digitally traded securities.
However, the SEC retorted that cryptocurrency already falls under clear rules and regulations.
At the heart of the SEC’s allegations is the charge that Coinbase has not registered with the agency for various securities products it offers. Armstrong counters this by arguing that no feasible pathway exists for such registration.
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“We tried, repeatedly – so we don’t list securities,”
The SEC, in conjunction with the Commodity Futures Trading Commission (CFTC), has been less than clear in their guidance on which digital assets should be classified as securities, with assets like Ethereum (ETH) and Tether (USDT) remaining controversial.
In the midst of these complexities, the U.S Congress has started the process of introducing crypto-specific legislation. Despite these efforts, Armstrong still considers the United States to be trailing behind the rest of the world in terms of industry rulemaking.
Undeterred, Armstrong declares,
“We’ll get the job done,”
encouraging the industry to keep progressing and building. He firmly believes that America will ultimately establish the right regulations for this burgeoning sector.
To support their stand on regulatory compliance, Coinbase published a video on Tuesday revealing key statistics highlighting the SEC’s non-cooperation. The company reported mentioning its “staking” 57 times in its S1 report, which the SEC approved, and also cited 30 private meetings with the SEC to seek guidance on legal compliance. However, critics highlighted that the SEC’s approval of Coinbase’s S1 didn’t necessarily validate the legality of the company’s underlying business.
Despite these discussions, the SEC has yet to establish comprehensive rules for crypto and continues to apply a 1946 test (the Howey Test) to classify tokens as securities.
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