Why Coinbase CEO Brian Armstrong is Confident in Winning the SEC Lawsuit
A Chance to Win Clarity
Coinbase CEO Brian Armstrong has stated that Coinbase is ready to take on the US’ Securities and Exchange Commission (SEC) lawsuit regarding non-compliance with securities registration. Armstrong is confident that Coinbase will win the lawsuit and thinks that this will help bring about clarity around crypto rules. Armstrong previously criticized the SEC for failing to clarify how securities laws apply to the crypto industry, leading to confusion around which digital assets qualify as securities and which are commodities.
One of the SEC’s main allegations against Coinbase is that the exchange has not registered with them for its securities products. Armstrong, however, stated that Coinbase has already made efforts to register but there is no clear path to do so due to the SEC and Commodity Futures Trading Commission’s conflicting statements about crypto asset registration. The SEC uses a test written in 1946, the Howey Test, to determine if tokens are securities.
Coinbase released a video on Tuesday detailing the exchange’s commitment to regulatory compliance and the SEC’s lack of cooperation. It stated that it mentioned its ‘staking’ 57 times within its S1 report, which was approved by the SEC. The exchange also had 30 private meetings with the SEC inquiring about how to stay legally compliant. Critics of Coinbase believe that the SEC’s approval of Coinbase’s S1 did not necessarily approve the legality of Coinbase’s underlying business.
Armstrong believes that the United States is falling behind the world in terms of industry regulations surrounding digital assets. Congress is currently drafting crypto-specific legislation to address the current regulatory environment.
Despite the ongoing lawsuit, Armstrong remains optimistic that the crypto industry will continue to grow and develop.