Coinbase CEO Brian Armstrong has made an impassioned criticism of the U.S. Securities and Exchange Commission (SEC), calling for widespread changes at the government agency.
Armstrong hit out at the uncertainty caused by the SEC due to its inconsistency over crypto regulation, with many companies and representatives left uncertain about compliance requirements.
This has been a direct impediment to progress for the sector in the States.
He also stated there should be a shake-up in the leadership of the body, for the next chair of the agency to dismiss “frivolous” cases and even to apologize for the damage caused to the American crypto industry.
The next SEC chair should withdraw all frivolous cases, and issue an apology to the American people.
It would not undue the damage done to the country, but it would start the process of restoring trust in the SEC as an institution. pic.twitter.com/kWVx73vYMs
— Brian Armstrong (@brian_armstrong) October 29, 2024
In an X post, Armstrong’s address was a takedown of the leadership of the SEC under Chair Gary Gensler, who has dismissed the prospect of digital currency like Bitcoin emerging as a widely used means of payment.
He went on to state the SEC should drop all cases against digital trading platforms such as Coinbase and Binance, whilst the wider landscape has seen some companies leave the U.S. for more crypto-friendly locations such as the United Arab Emirates (UAE), El Salvador, and Hong Kong.
A disaster for the whole industry, says Uyeda
His stance was reflected in recent comments made by SEC Commissioner Mark Uyeda who branded the agency’s approach to regulating crypto a “disaster”.
Uyeda cited a lack of clear guidance, going further to question Gensler’s leadership which has supposedly left crypto firms in the dark.
The commissioner was speaking at a Fox Business panel on October 10, deriding the enforcement-first policy, at the expense of effective regulation and defined guidelines that would lead to progress.
The intervention of Coinbase boss Brian Armstrong is timely, as the outcome of the upcoming 2024 U.S. presidential election could have an impact on the direction of crypto legislation and the SEC leadership tasked with overseeing it.
His frustration and ire concentrated on the shifting narratives at the SEC toward digital assets and crypto exchanges, as evidenced over the years.
In 2018, the SEC effectively stated digital assets like Bitcoin do not qualify as securities, only to reverse that position three years later, claiming they could represent investment contracts.
This year, it was a 180-degree turn when the SEC intimated that digital assets are just a form of computer code, only to reverse that call days later with the reinstatement of the investment contracts definition.
The constant change and reclassification only create ambiguity and hesitancy. It cannot be good for the regulators and as bluntly explained by Armstrong, it is a major hindrance and a force against the U.S. crypto industry.
Image credit: Via Midjourney