Why Coinbase CEO Believes SEC’s Crypto Warning Is Harmful To The US
28 April 2023 - 6:41PM
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Coinbase Global and the US Securities and Exchange Commission have
been at loggerheads for some time, and on Friday, Coinbase CEO
Brian Armstrong released a video message calling the SEC’s warning
“not constructive” and “not good for America.” The
friction between Coinbase and the SEC is part of a bigger
attempt by the US government to regulate the cryptocurrency sector.
SEC Chair Gary Gensler has called for cryptocurrency exchanges to
register with the agency, which is the source of the animosity
between Coinbase and the SEC. This warning was issued by Armstrong
in response to a Wells Notice that was delivered to Coinbase a
month ago. The Wells Notice stated that the staff of the SEC had
formed a “preliminary determination” to suggest an enforcement
action for Coinbase for violating federal securities laws. Coinbase
CEO Opens Up On SEC’s Hardline Crypto Stance In response to the
Wells notice, Coinbase, the largest cryptocurrency exchange in the
United States by volume, filed a letter to the SEC arguing that the
regulator’s staff’s legal arguments are “flawed and untested” and
that an enforcement action “would present major programmatic risks
to the commission.” While Armstrong made it clear in his video that
he was ready to take on the SEC in court, Coinbase’s written
response to the SEC claimed that the agency’s threat of litigation
“appears intended to pressure” the organization into agreeing with
the SEC’s position that all cryptoassets on the Coinbase platform
are securities. Coinbase Lawyer Says They’re Ready To Cooperate
With SEC Also featured in the video was Coinbase’s chief legal
officer, who indicated the company was ready to visit the SEC at
any time to create a feasible future for the cryptocurrency
industry in the United States. In the 14 days since 2023 rolled in,
the SEC has taken action against crypto entities and individuals
with 14 separate orders of enforcement. Crypto staking schemes
offered by other exchanges including Bittrex and Kraken have also
been accused of offering the sale of unregistered securities.
Coinbase has responded by saying it will oppose any regulation of
its own staking scheme, which is distinct from Kraken’s. Despite
claims from the SEC staff that Coinbase’s staking services
constitute investment contracts, Coinbase maintains that it does
not list, clear, or affect trading in securities through its
platform. BTCUSD halfway through the $30K mark, currently trading
at $29,485 on the daily chart at TradingView.com Related Reading:
Binance CEO Denies As ‘Wrong’ His Inclusion In Bloomberg’s
Wealthiest People List The Elusive Middle Ground Meanwhile, even
while Coinbase’s share price is still down 82% from its IPO in
April 2021, it was up more than 53% since the beginning of January.
Regulatory bodies and industry participants alike are struggling to
find a middle ground between fostering innovation and ensuring the
safety of the cryptocurrency market, and the ongoing conflict
between Coinbase and the SEC is a microcosm of this broader fight.
While the final resolution of this issue is still up in the air, it
highlights the importance of maintaining open lines of
communication and working together among all necessary parties to
promote the success of the crypto business in accordance with
applicable laws and regulations. -Featured image from Coinpedia
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