Coinbase CEO: SEC’s Tone Started to Change in the Past Year
Following the SEC lawsuit, Coinbase’s CEO Brian Armstrong has offered his first interview to Bloomberg. In this conversation, Armstrong outlines his views on the legal proceedings and forecasts how the trial could influence the wider cryptocurrency market.
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SEC vs Coinbase: How long will the lawsuit last?
Brian Armstrong, while assessing the charges brought against Coinbase by the Securities and Exchange Commission (SEC), appeared neither downcast nor bewildered. The SEC took legal action in a New York federal court on June 6th, asserting, among other things, that 13 cryptocurrencies listed are actually securities. Therefore, selling these assets through an unlicensed broker like Coinbase would be considered a breach of existing laws.
The exact duration of the impending court proceedings is uncertain. With a hint of irony, Armstrong quotes his company's Chief Legal Counsel, who is ready to fight until the end and possibly escalate the matter to the Supreme Court.
Brian Armstrong maintains a positive attitude Source: Youtube
Armstrong urges the crypto community to see the situation with Coinbase not as an issue, but as an opportunity to drastically improve the circumstances within the crypto space.
This could help clarify the company's future prospects and, should Coinbase prevail, provide guidance for the trajectory of the entire US crypto industry.
Their victory would possibly ensure that blockchain and crypto businesses won't rush to relocate to more accommodating jurisdictions.
When did the SEC first raise issues with Coinbase?
Armstrong looks back with noticeable irritation at a time when Coinbase and the SEC were on better terms. The relationship was close-knit when the crypto exchange received the SEC's approval to go public.
“They allowed us to become a public company with full knowledge of how we list assets and how we operate our staking program. And it really wasn't until a year later or so that they started to have more question” Armstrong says with a hint of surprise.
He mentions the extensive discussions and efforts Coinbase made to secure a brokerage license. Regrettably, these endeavours proved unsuccessful.
“We very thoughtfully engage with them. I think we met with them 30 times over the last year explaining every aspect of our business.
We came in hat in hand and said how do we register, we want to register, you know, we even acquired a broker-dealer license which is still dormant. They haven't found a way to activate it
Armstrong says, his composure seemingly faltering at this point
Armstrong, as the CEO of Coinbase, expresses profound disappointment, as the SEC remained tight-lipped and ultimately started to push for stricter regulations.
Is Coinbase considering an exit from the U.S.?
Regardless of the current challenges and uncertainties, Brian asserts that Coinbase has no plans of relinquishing its place in the U.S. market. Armstrong remains steadfast in his faith in democratic principles and the supremacy of law.
If the SEC can't provide a definitive regulatory framework, Armstrong believes that the U.S. judicial system will assist in establishing a legal precedent. Furthermore, he doesn't dismiss the possibility of Congressional intervention, which could clarify the regulator's role and safeguard consumer rights.
The US is at risk of being left behind… The UK, Hong Kong, Singapore, the UAE, these are all saying we want to be crypto and web 3 hubs, we have clear rule books, come here and build your business
Armstrong continually emphasizes
Lawsuit against Coinbase and its impact on the crypto market
Regarding industry instability, Armstrong doesn't anticipate losing clients or seeing banking partners retreat. The SEC's rhetoric has been consistent of late, and the legal proceedings against the cryptocurrency exchange haven't caught anyone off guard. Everyone seems understanding of the ongoing situation. Most likely, they're waiting to see how things progress, hoping for more explicit instructions from the U.S. government in due course.
Armstrong also speculates that the upcoming 2024 elections could bring about a dramatic shift in the President's administration policy, potentially paving the way for a more crypto-friendly regulatory environment.
To conclude, he suggests that savvy investors who trust the technology could view any market downturn as an opportunity for strategic investments. Cryptocurrency is a key global technological trend. Would the U.S. really permit itself to miss out on such an important innovation?
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