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Brian Armstrong on the SEC’s Enforcement Actions
Something Shifted About a Year Ago: Coinbase CEO Brian Armstrong
Brian Armstrong, the CEO of Coinbase, revealed the company’s journey before negotiations with the U.S. Securities and Exchange Commission (SEC) reached a standstill. In a recent interview with the Wall Street Journal (WSJ), Armstrong explained the changes in the SEC’s approach to cryptocurrency enforcement and how the exchange strove to work with regulators from the beginning.
Before Coinbase’s listing on Nasdaq in April 2021, the SEC reviewed and approved its business model. Regarding this, Armstrong stated that the SEC allowed them to become a public company.
We go back to 2021, we wanted to become a public company, we described everything about our business, the assets that we list on our platform, how we do staking. The SEC at that point allowed us to become a public company.
However, the SEC’s stance started to change. Armstrong revealed that the delisting of XRP from the exchange was one of the first actions Coinbase took in response to regulator feedback. Despite the pending court case against Ripple, they tried to collaborate with regulators and work with them.
According to Armstrong, about a year ago, the SEC began to shift its tone, as he told the Wall Street Journal:
We kind of got this information from the SEC that, well actually everything other than Bitcoin is a security. And we kind of said to ourselves well, that’s not our understanding of the law.
Armstrong claimed that although the company had more than 30 meetings with the SEC in the past year, they did not get regulatory clarity about how they could operate. Armstrong believes that the SEC’s strict posture is behind the current legal actions against the exchange and he fears it could lead to crypto companies leaving the U.S., as he stated:
The only sort of high-level statements they’ve made is that everything other than bitcoin is a security, which that’s not what it says in the law. That would also kind of mean the end of the crypto industry in the U.S.
