Coinbase CEO Blasts SEC, Urges Next Chairman to Withdraw Cases and Apologize to American Citizens

On Oct 29, 2024 at 10:44 am UTC by · 3 mins read

Coinbase CEO Brian Armstrong criticizes the SEC for inconsistent crypto regulations, urging the next chairman to withdraw cases and apologize publicly.

Coinbase CEO Brian Armstrong took a swipe at the US Securities and Exchange Commission (SEC) on his X page. He called on the next SEC chair to withdraw what he described as frivolous cases and even issue an apology to the American public.

This statement from the Coinbase CEO comes amid ongoing frustration in the crypto industry regarding the financial watchdog’s inconsistent approach to digital asset regulation.

Armstrong argued that unclear SEC rules about crypto have slowed down new ideas in the US crypto space. He posted a picture showing how the SEC has made confusing statements about whether digital assets, like Bitcoin, count as securities.

According to the image posted, the commission in 2018 stated that a digital asset is not a security. However, in 2021, the agency changed its stance, saying that digital assets embody and represent an investment. The post further revealed that in 2024, the SEC shifted its goalposts on digital assets three times.

While the commission initially said digital assets are just computer code, it changed its stance five days later, saying that digital assets represent an investment contract. Eight months later, the SEC again claimed that a digital asset is not a security.

The SEC’s inconsistency extends to its authority over digital asset exchanges. While the SEC initially claimed in 2021 that there was no market regulation for crypto, the agency returned in 2022, stating that Congress had given them a broad framework to regulate exchanges. This inconsistency in regulation has left many companies unsure of which rules to follow, leading to frustration within the crypto industry.

Armstrong noted in his post that an apology from the next chair would undo the damage the agency has done to the country and, at the same time, begin to restore trust in the SEC as an institution.

Legal Battles and the Future of Digital Asset Regulation

Coinbase and the SEC have been in an intense legal battle; the agency claimed that the crypto company has been running an unregistered service through its staking-as-a-service program since 2019, allowing its customers to earn profit by staking their digital assets.

The crypto exchange initiated a lawsuit after the SEC rejected its 2022 request for new rules, arguing that unclear regulations make it difficult for the exchange to operate smoothly. A clear crypto regulation has been what many in the crypto industry are calling for. Many crypto users have called for the dismissal of the current SEC Chairman Gary Gensler.

Republican presidential candidate Donald Trump said in one of his campaigns that he would sack Gensler on his first day in office, which further adds to the growing frustration with the agency and its officials. The future of crypto regulation in the US remains a hot topic, and the forthcoming US election will be crucial in deciding what is next.

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