Brian Armstrong, the CEO of the cryptocurrency exchange Coinbase, stated that regulating crypto is not overly difficult and expressed his belief that the United States will eventually have clear regulations, “even if it takes some time”.
Armstrong was interviewed by The Wall Street Journal on June 11, shortly after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase on June 6. According to the SEC, Coinbase had been running a securities exchange, broker-dealership and clearing house without registering with the commission.
In the interview, Armstrong addressed the lawsuit, asserting that he does not think Coinbase needed to be registered for it to function.
Despite not declaring Coinbase to be a broker-dealer, Armstrong noted that the exchange had encountered issues in obtaining a license.
He stated, “We are not claiming to be a broker-dealer, however, we have obtained a broker-dealer license that is still inactive as they do not allow us to activate it.”
Armstrong commented that regulating is not complicated and the U.S. will eventually achieve the desired result, even if it takes some time.
He emphasised that the case between the SEC and Coinbase is significant for the entire U.S. cryptocurrency sector, and he wishes it will bring more understanding and keep the nation from “lagging behind” the rest of the world.
Armstrong believes that once the United States has clear and established rules concerning cryptocurrency, it will prompt crypto businesses to come back to the nation.
On April 11, Cointelegraph reported that the proportion of global crypto developers located in the United States had decreased by 26% from 2018 to 2022, attributing this to the “lack of clear regulation” and suggesting that “America’s advantage may be diminishing.”
Armstrong emphasized important regulatory aspects that he thinks ought to be made explicit, such as establishing definite “limits” between the two main U.S. financial regulators: the SEC and the Commodity Futures Trading Commission.
He highlighted that, unlike the United Kingdom which has a single financial regulator, the U.S. is currently experiencing a conflict between two regulatory authorities.
SEC lawsuits against Binance and Coinbase have unified the crypto industry.
He believes that many basic rules from traditional finance can be applied, including consumer protection, financial statement audit requirements, and Anti-Money Laundering and Know Your Customer procedures.
Armstrong emphasized that there is presently “no established regulation” for digital currency in the U.S., and that Coinbase had been requesting more clarity from the SEC but had “not received any response.”
On June 7, Armstrong replied to the SEC lawsuit against Coinbase via Twitter, expressing his pride in being able to “represent the industry in court” and to get “clarity around crypto rules.”
The SEC has labeled 67 crypto-securities, and both Binance and Coinbase are heading to court, as reported in the June 4–10 edition of Hodler’s Digest.
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