Coinbase CEO says he’s ready to fight the SEC in court


Clarification of virtual currency regulations

Brian Armstrong, CEO of major U.S. cryptocurrency exchange Coinbase, said in an interview with CNBC on the 18th that he will fight the U.S. Securities and Exchange Commission (SEC) in court for several years if necessary. He said he was ready.

Coinbase announced last month that it had received a “Wells Notice” from the SEC. This time, Mr. Armstrong said he needed to actually go to court and clarify the regulations, and he would have to set a precedent.

A Wells notice is a formal letter to a company or individual informing them that the SEC will take legal action. The SEC was investigating some of the digital assets listed on Coinbase, as well as the company’s services, such as “Coinbase Earn.”

connection: U.S. SEC investigates Coinbase on suspicion of violating securities laws Sends Wells notice

Here’s what Armstrong has to say about the SEC this time:

The regulator’s job is to publish clear rules. And we must not only ensure that the country’s markets operate safely, but also thrive.

I feel like they are completely abdicating responsibility.

If Coinbase were to list cryptocurrencies that are considered securities, the company would have to register its business with the SEC and be subject to reporting obligations, which would increase its operational burden.

According to Barclays, Coinbase may have to separate its exchange and brokerage businesses as current law does not allow stock exchanges to provide services directly to retail investors. It is said that there is

Coinbase said it believed the products and services it traded were legal when it announced that it had received the Wells notice. He said he would take legal action to clarify regulations if necessary and to prove the SEC’s unfairness and inadequacy in court.

The SEC lawsuit against Bittrex, which was revealed on the 17th, explained the securitization of six stocks, including Algorand (ALGO). In particular, since ALGO is also a stock that Coinbase handles, attention to the ruling is increasing.

connection: U.S. SEC sues virtual currency exchange Bittrex, claiming securitization of 6 stocks

Consider moving to rice

In addition to reviewing listings, Coinbase has also tried to communicate with the SEC by asking questions about which listed stocks qualify as securities and proposing business registrations. Last month, it also filed an opinion focusing on the securities law treatment of staking services.

connection: “Why should staking services be excluded from securities certification?” US Coinbase filed a petition with the SEC

Nevertheless, the SEC’s stance remains unchanged and continues to enforce “regulation by enforcement action.” Last month, it was reported that Coinbase was considering establishing a trading hub outside the United States.

connection: Coinbase to establish virtual currency trading bases outside the US = reports

Also, according to overseas media, Mr. Armstrong said at a fintech conference held in London on the 18th, “If US regulations do not change, we are also considering moving the headquarters from the United States.” speaking.

On the 17th, the SEC sued the cryptocurrency exchange Bittrex for providing securities trading, brokerage, and clearing services to US investors without registering the business. Coinbase is expected to be the next to be sued.

connection: U.S. SEC sues virtual currency exchange Bittrex, claiming securitization of 6 stocks

What is coinbase

A major U.S.-based cryptocurrency exchange. It was founded in 2012 and listed on the Nasdaq in April 2021.

▶Cryptocurrency Glossary

connection: What is the virtual currency exchange Coinbase | Information and points to note for investors

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