Coinbase CEO Brian Armstrong has recently expressed his concerns about the lack of clarity and consistency in the U.S. crypto regulation. He believes that the current approach of the Securities and Exchange Commission (SEC) is detrimental to the innovation and growth of the crypto industry in the U.S., and may benefit China, which is developing its own digital currency and promoting its blockchain technology.
Armstrong has called on Congress to intervene and provide a clear and fair framework for crypto regulation that would protect investors, foster competition, and support American leadership in this regard.
Coinbase is one of the largest and most popular cryptocurrency exchanges in the world, with over 70 million users and a market capitalization of over $50 billion. However, the company has faced several challenges and uncertainties from regulators in its home country, especially from the Securities and Exchange Commission (SEC).
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The SEC is the federal agency responsible for enforcing securities laws and regulating the securities industry in the U.S. However, the SEC has not issued clear and comprehensive rules for crypto assets, leaving many questions unanswered about which tokens are considered securities and which are not.
This lack of clarity has led to what Armstrong calls “regulation by enforcement”, where the SEC initiates enforcement actions against crypto companies without providing clear guidance or notice beforehand. For example, in September 2021, the SEC threatened to sue Coinbase if it launched a lending product that would allow users to earn interest on their crypto holdings. The SEC claimed that the product would involve securities but did not explain why or how.
Armstrong has criticized this approach as unfair and harmful to innovation and consumer choice. He has urged Congress to intervene and provide a legislative framework for crypto regulation that would protect investors, promote competition, and foster innovation. He has also called for a more collaborative and constructive dialogue between regulators and industry stakeholders.
Armstrong argues that the U.S. is falling behind other countries that have adopted more favorable and proactive policies for crypto. He cites the example of China, which has launched its own digital currency and is positioning itself as a leader in the global digital economy. He warns that if the U.S. does not act soon, it will lose its edge and influence in the financial world.
Armstrong also points out that crypto is not just a speculative asset class, but a transformative technology that can modernize finance and empower millions of people around the world. He says that crypto, like the internet before it, has the potential to create new opportunities and benefits for society. He urges policymakers to see the big picture and support the development of this industry in America.
Armstrong has also appealed to Congress to intervene and provide a legislative framework for the crypto industry that would foster innovation and protect consumers. He believes that the U.S. is falling behind other jurisdictions that have adopted more sensible and supportive crypto policies, such as the European Union and the United Kingdom .
He warns that if the U.S. does not create a conducive environment for crypto businesses, they will be forced to relocate to offshore havens where the rules are more favorable. He says that this would be detrimental to the U.S. economy and national security, as well as to the global development of crypto space.