Coinbase (NASDAQ: COIN) CEO Brian Armstrong is holding firm Tuesday in a legal battle with the Securities and Exchange Commission expressing his determination to “get the job done” in the face of the regulatory agency’s lawsuit.
Photo Illustrating Coinbase in Suqian, Jiangsu Province, China on June 6, 2023. COSTFOTO/BENZINGA
Armstrong responded to the SEC complaint filed against Coinbase in a tweet, asserting that his company is ready to go to court to gain clarity on regulations around cryptocurrencies.
The SEC previously reviewed Coinbase’s business and approved its public listing in 2021, the CEO said.
He also mentioned Coinbase’s multiple attempts to “come in and register,” saying that due to the lack of a clear path to do so, Coinbase refrains from listing securities, rejecting the majority of the assets it reviews.
Armstrong drew attention to what he said are contradictory statements made by the SEC and the Commodity Futures Trading Commission, highlighting the apparent lack of agreement between the two regulatory bodies on the definitions of security and commodity.
“The SEC chair is really an outlier,” said Armstrong in response to lawmakers framing regulations over cryptocurrency that could affect his business.
The ongoing ambiguity has assisted in the introduction of new legislation by the U.S. Congress aiming to resolve these issues, reflecting a global trend toward the establishment of clear rules to support this evolving technology.
Armstrong criticized the SEC for what he said is its “regulation by enforcement” approach, arguing that it is damaging to America.
Brian Armstrong, CEO and Co-Founder, Coinbase, speaks during the Milken Institute Global Conference on May 2, 2022 in Beverly Hills, California. (Photo by Patrick T. FALLON / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images)
He voiced Coinbase’s readiness to turn to the courts for the clarity needed to navigate this complex regulatory environment.
“It alleges no fraudulent activity, only that Coinbase merged three functions that are typically separated in traditional securities markets—those of brokers, exchanges, and clearing agencies—but has never registered as any of these things, violating securities law,” said Braden Perry, a former CFTC attorney regarding the lawsuit against Coinbase.
Armstrong noted the unique nature of the lawsuit against Coinbase, which he said is solely focused on the definition of security, and he expressed confidence in both the facts of the case and the law.
Armstrong concluded his remarks with a note of defiance and determination, saying, “We’ll get the job done.”
He called on the industry to continue innovating and assured that America will eventually come to the right conclusion on this issue.
“In Coinbase’s case, for instance, there hasn’t been any allegation of misappropriation of customer funds,” said Armstrong.
The SEC had previously gone after Binance over conflicts of interest, lack of disclosure, and evasion of the law.
“Today we charged Binance Holdings Ltd. (Binance); U.S.-based affiliate, BAM Trading Services Inc., which, together with Binance, operates Binance.US; and their founder, Changpeng Zhao, with a variety of securities law violations,” said the SEC on a statement against Twitter.
The cryptocurrency industry has been under fire since the fall of FTX.
Produced in association with Benzinga
Edited by Alberto Arellano and Kyana Jeanin Rubinfeld
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