Coinbase COIN CEO Brian Armstrong has weighed in on the ongoing dispute between his company and the Securities and Exchange Commission (SEC) and suggested that the resolution may involve a change in SEC leadership.
What Happened: In a Yahoo interview on Friday with Brian Sozzi, Armstrong said that the SEC has adopted a hostile and enforcement-focused approach towards cryptocurrencies, choosing regulation through enforcement rather than engaging in the required rulemaking process.
On the removal of Gary Gensler from SEC Chair, Armstrong said “Maybe” that will happen in 2024, but “that would certainly help."
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Maintaining Strong Relationships Despite Differences
“I do think the leadership there has taken a very hostile view towards crypto … regulation by enforcement posture instead of just engaging in rulemaking as they’re required to by law.”
Armstrong, however, emphasizes that Coinbase maintains strong relationships with the SEC staff and commissioners.
He remains optimistic that clarity regarding the operations of the US crypto industry will eventually be achieved, either through court rulings or legislation passed by Congress. Additionally, he hints at the possibility of a different SEC chair in the future, believing that a resolution will be reached.
“Or maybe next year we’ll have a different SEC chair. Somehow this is gonna get resolved in the US," he said.
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Trading Volumes And Flight To Quality
In terms of trading volumes, Armstrong acknowledges a decrease from the peak levels experienced in 2021 but affirms that such cycles are expected in the crypto industry. "So we see when prices go up, obviously, more retail interest. What’s interesting in this down market is that we’ve actually seen there’s been a kind of a flight to quality."
Regulatory Outlook
Regarding regulation, Armstrong highlights that court rulings can establish precedents and provide clarity irrespective of the lawsuit’s outcome. He also mentions Congress’s engagement, referring to bills like the Fit 21 bill and the stablecoin market structure bill, which have received bipartisan approval in the House. " I also think– there’s a possibility we’ll just get a different SEC chair in 2024 or beyond. "
Concerning Coinbase’s role in shaping regulations, Armstrong mentions the company’s intention to support candidates sympathetic to cryptocurrencies through donations. "I think 2024 is an election where the voters of America are really going to hold candidates’ feet to the fire and say, what is your position on crypto?
Why It Matters: The SEC filed a lawsuit against Coinbase in June as part of its crackdown on the cryptocurrency market. The suit alleged that Coinbase had operated an unregistered exchange by allowing the sale of certain crypto tokens considered securities under the SEC’s jurisdiction.
Price Action: At the time of writing, Bitcoin (CRYPTO: BTC) was trading at $26,267.75, up 1.42% in the last 24 hours, according to Benzinga Pro.
Image Courtesy: Flickr
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