Coinbase CEO Reveals Tense Relationship With SEC Chairman Gensler
- Coinbase CEO Brian Armstrong hopes for changes in U.S. crypto regulatory policies after the 2024 U.S. election.
- The Republican Party’s friendliness to cryptocurrencies is a positive sign for Coinbase’s future in the US market.
- Non-transaction fees account for 50% of Coinbase’s revenue, emphasizing the importance of regulatory clarity for the company’s continued success.
Coinbase CEO Brian Armstrong discusses the SEC lawsuit and Coinbase’s goal to get clarity for the cryptocurrency industry. Armstrong emphasizes that Coinbase distinguishes between securities and commodities.
The legal dispute centers on whether certain cryptocurrencies listed on Coinbase’s platform are securities or commodities. The SEC alleges that Coinbase broke the rules by listing tokens that the regulator claims are securities, while Coinbase maintains that it has followed the law and that the tokens in question are commodities. Coinbase has been formally petitioning the SEC for regulatory clarity, as the lack of clarity is a major issue in the US. Every startup in the crypto space spends significant amounts of money on lawyers who tell them that there is no case law and they cannot give a clear answer.
Coinbase CEO, Brian Armstrong, sat down with The Wall Street Journal to discuss the situation. Armstrong emphasized that Coinbase has a committee responsible for reviewing coin listings and distinguishing whether they are securities or commodities. He added that Coinbase had shared this internal framework with the SEC. Despite this, the SEC has sued Coinbase, alleging that the company broke the rules by listing tokens the regulator claims are securities.
Armstrong stated that Coinbase has long had a tense relationship with SEC Chairman Gary Gensler, but the company does not have a problem cooperating with other regulators. He also noted that the company’s revenue comes mainly from transaction fees on Bitcoin and Ethereum, with non-transaction fees accounting for 50% of the revenue. Coinbase has had a tense relationship with the SEC for some time, and the company’s decision to push ahead on adding tokens despite the risk has been hanging over the industry.
Additionally, Armstrong said that Coinbase had reviewed over a thousand assets, rejecting 90% of them and listing only those that the company felt had a strong argument that they were commodities. Coinbase has acquired a broker-dealer license, which is still dormant because the SEC has not allowed the company to activate it. Coinbase’s goal with the court case is to get clarity for the industry, not just for the company but for the entire cryptocurrency industry and America as a nation.
The lack of clarity in the regulatory environment has been an ongoing issue for the cryptocurrency industry. The US needs to catch up with other countries like the UK, Singapore, and Hong Kong, which have clear rules and comprehensive crypto legislation. The lack of clarity has made it difficult for businesses to operate in the US and has hindered innovation in the sector. Coinbase’s legal battle with the SEC could result in greater regulatory clarity and help to unblock the issue.
The CEO said he looks forward to changes in U.S. crypto regulatory policies after the 2024 U.S. election. The Republican Party is friendly to cryptocurrencies. Coinbase will not abandon the US market.
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