‘We’re Committed to Upholding the SEC’s Rules’: Coinbase CEO


Brian Armstrong, the CEO of cryptocurrency exchange Coinbase, said Wednesday that the company is dedicated to upholding the Securities and Exchange Commission’s (SEC) rules. Armstrong said during an interview with Bloomberg TV that Coinbase has maintained a “good relationship” with the federal agency that is charged with protecting U.S. investors.

“We’re going to continue to invest in those relationships,” he said. “Our interests are aligned.”

The San Fransisco-based exchange’s CEO added that bringing digital assets within the regulatory perimeter in the U.S. is in the interest of both Coinbase and the SEC, and will provide consumers with better protection. Armstrong also stated that he would like to keep the potential innovation provided by cryptocurrencies available to financial markets.

The collapse of cryptocurrency exchange FTX last November has led to increased scrutiny from regulators, who have taken enforcement actions against those they claim are in violation of securities laws. Earlier this month, the SEC imposed a $30 million penalty against crypto exchange Kraken for failing to register its staking-as-a-service program as a security.

Kraken agreed to end its stake service in the U.S. as part of the settlement. Jesse Powell, the CEO of Kraken, which is the second largest exchange by volume that’s based in the U.S. according to CoinGecko data, has been vocal on Twitter following the settlement, stating that the SEC’s “regulation by enforcement” approach “does not help the industry nor consumers.”

Coinbase’s Chief Legal Officer Paul Grewal has also expressed his criticism of the SEC’s approach to regulating digital assets.

Coinbase’s chief executive, Brian Armstrong, has expressed his firm’s interest in a productive relationship with the U.S. Securities and Exchange Commission (SEC). Armstrong suggested that such a relationship could help the public better understand the products and services offered by Coinbase.

During the company’s latest earnings call with shareholders, Armstrong noted that the SEC’s complaint against the alleged Kraken should bring about proper disclosure and safety measures. He claimed that Coinbase’s staking product, which is not a security, has “many differences” when compared to the product offered by Kraken. Armstrong further explained that Coinbase customers do not give up ownership of digital assets when engaging with the company’s staking product.

Staking is a process by which an individual locks their tokens in a community in order to validate transactions and receive rewards in the form of cryptocurrency. Coinbase’s staking product supports Ethereum, Solana, and Binance’s proprietary blockchain, Binance Smart Chain.

SEC chairman Gary Gensler released a video on Twitter outlining the agency’s stance on why staking-as-a-service should come with the appropriate disclosures and safeguards required by law. Armstrong confirmed that Coinbase is prepared to fight the SEC if necessary, but the company is hoping for a productive relationship. He maintained that Coinbase is within the bounds of the law given the SEC’s stance on certain assets being classified as securities.

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