Brian Armstrong, CEO of Coinbase, the largest U.S.-based cryptocurrency exchange, explained how negotiations reached a standstill with the U.S. Securities and Exchange Commission (SEC). In a recent interview with the Wall Street Journal, Armstrong detailed the changes in how the SEC approached securities regulation and how the exchange has tried to work with regulators since day one.
Coinbase CEO Brian Armstrong on SEC Enforcement Actions: ‘Something Shifted About a Year Ago’
Brian Armstrong, the CEO of Coinbase, one of the largest U.S.-based cryptocurrency exchanges, explained the company’s journey before reaching a standstill in negotiations with the U.S. Securities and Exchange Commission (SEC).
In a recent interview with the Wall Street Journal (WSJ), Armstrong detailed the changes in the stance of the SEC regarding cryptocurrency enforcement and how the exchange finally came to face the government in court.
According to Armstrong, before the exchange was listed on Nasdaq in April 2021, the SEC reviewed its business model and greenlighted its application. Armstrong declared:
We go back to 2021, we wanted to become a public company, we described everything about our business, the assets that we list on our platform, how we do staking. The SEC at that point allowed us to become a public company.
However, things started to change. One of the first actions that Coinbase executed due to regulator feedback was the delisting of xrp from the exchange. Armstrong stated that, while the court case against Ripple is still pending, they wanted to collaborate with regulators and work with them.
About a year ago, “a totally different tone started to happen,” per Armstrong’s statements. He told the WSJ that:
We kind of got this information from the SEC that, well actually everything other than Bitcoin is a security. And we kind of said to ourselves well, that’s not our understanding of the law.
Possible Consequences of the SEC’s Actions
Armstrong commented that the company tried to work with the SEC, having more than 30 meetings with the organization during the last 12 months. While the SEC asked Coinbase “every question under the sun,” the exchange did not get regulatory clarity about how it could operate.
Armstrong stressed that the SEC’s strict and rigid posture is behind the current legal actions against the exchange, which Armstrong and many others believe are making crypto companies leave the U.S. On this, he stated:
The only sort of high-level statements they’ve made is that everything other than bitcoin is a security, which that’s not what it says in the law. That would also kind of mean the end of the crypto industry in the U.S.
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