In a special interview with a media outlet, Brian Armstrong slammed United States regulators for handling crypto as a ‘jump ball’ in a current war over the agency that should control the market.
Brian Armstrong, the chief executive officer of Coinbase, a San Francisco-founded crypto exchange, is under attack from the United States Securities and Exchange Commission (SEC). This is despite the firm’s efforts to get clarity from the regulator.
Tens of Coinbase-SEC Meetings Turned Furtile
In a special interview with a media outlet, Armstrong claimed that Coinbase has met the Securities and Exchange Commission 30 times over the past one and a half years. He said they are yet to get feedback from them regarding the assets believed to be securities and those not.
Armstrong cited ‘robust legal arguments’ and external legal views regarding listed assets to say that Coinbase has requested feedback several times during those meetings. However, none has been provided.
Armstrong said they got a Wells Notice instead of getting feedback.
A Wells Notice, given in March, refers to a letter from the Securities and Exchange Commission informing the recipient about the Commission’s plans to introduce changes. Three months afterwards, it happened.
According to a June 6 lawsuit, Coinbase was charged by the Securities and Exchange Commission for running an unlicensed securities exchange. Additionally, the regulator claimed it considered numerous crypto assets listed on Coinbase unlicensed securities under the federal law of the United States.
They include Polygon, Solana, and Cardano. The projects have repelled this designation in more or less colourful terms. Coinbase also denies the charges, asserting that based on the criteria for so-called ‘investment contracts,’ tokens listed on the exchange cannot be securities.
Challenging Environment for Crypto to Thrive in the US
The firm said that such a ‘regulation by enforcement’ environment and the absence of vivid guidance compelled it to consider doing business outside the United States. According to Armstrong, a current ‘turf battle’ between the Securities and Exchange Commission and the Commodities Futures Trading Commission (CFTC) is causing regulatory problems for all crypto companies.
He contrasted the United States’ situation with the United Kingdom, where he attended a government investment summit.
Armstrong said that the Financial Conduct Authority engaged productively with them during the summit. A single securities and commodities regulator is good since they do not have the problem being experienced in the United States. In this case, the SEC and the CFTC are occasionally experiencing a bit of turf battle over who controls which assets, which is sometimes a form of a jump ball between the two.
Armstrong said it is not an issue in the United Kingdom and added that clarity is the first thing they consider when pursuing global investment and expansion. Further, he said the British government under Rishi Sunak, the Prime Minister, has supported crypto. He added that the nation should be a Web3 and crypto hub, according to most people.
Pro-crypto UK is attracting new investments, with Andreesen Horowitz opening an office in London. Armstrong also said that Coinbase has created an estimated 200 ‘high tech and high-paid’ jobs in the nation and intends to do more.
Coinbase Hails Regulatory Clarity in the UK
According to Armstrong, the UK’s situation is different from that of the United States, where regulation by enforcement is widespread. He said that the environment has not been entirely clear.
In case the company does not acquire clarity from the Securities and Exchange Commission, it would be essential to go to court to have a case law made. Armstrong also claimed he expects ‘Congress to act and ratify new legislation,’ citing two bills before the House.
However, legislators do not necessarily concur with Armstrong’s portrayal of a regulatory turf battle. According to some, this is a deflection. During a joint hearing earlier this year, United States Rep Stephen Lynch (D-MA) said that the ‘turf war’ conversation between the CFTC and SEC was a narrative ‘ignited by the industry.’
Lynch also noted that crypto sector issues surrounding regulatory uncertainty are essentially ‘masked non-adherence to current regulations.’