Coinbase CEO Brian Armstrong has highlighted the SEC’s harmful regulation by enforcement approach in light of the recent lawsuit.
Armstrong reminded everyone that the SEC reviewed his company before allowing it to go public in 2021.
Ripple executives also spoke in support of Coinbase and called out the SEC for its hostile stance on crypto.
Brian Armstrong, the Chief Executive Officer of Coinbase Global Inc, has responded to the U.S. Securities and Exchange Commission’s lawsuit filed earlier today. The SEC’s complaint charged the largest crypto exchange in the United States for operating as a registered securities exchange, broker, and clearing agency and violating securities laws.
Coinbase CEO: Proud To Represent Crypto Industry In Court For Clarity
Brian Armstrong took to Twitter to call out the SEC for resorting to litigation instead of guiding his crypto exchange and similar entities toward regulatory compliance by engaging in rulemaking for the broader crypto industry. Armstrong told his followers that his company is proud to represent the industry in court in pursuit of clarity surrounding rules for the crypto space. The Coinbase executive also reminded everyone that the securities regulator had reviewed the company’s business before allowing it to go public in 2021.
Responding to SEC Chair Gary Gensler’s call for crypto firms to “come in and register”, Brian Armstrong clarified that there was no path for firms such as his to get registered with the regulator under the current regulatory regime. He also highlighted the contradicting statements made by the SEC and the Commodities and Futures Trading Commission (CFTC) over the difference between a security and a commodity. Armstrong cited the recent events to underscore the need for new legislation from the US Congress to support crypto by putting clear rules in place.
Instead of publishing a clear rule book, the SEC has taken a regulation-by-enforcement approach that is harming America. So if we need to avail ourselves of the courts to get clarity, so be it.”
Brian Armstrong, Chief Executive Officer at Coinbase
Speaking on the matter, Coinbase’s Chief Legal Officer Paul Grewal stated that the SEC’s enforcement-only approach in the absence of clear rules for the digital asset industry was hurting America’s economic competitiveness. Grewal added that the lawsuit would not affect the exchange operations and that it will continue to operate as usual. Tweeting in support of Coinbase, Ripple CEO Brad Garlinghouse called out SEC Chair Gary Gensler for his “laughable pro-innovation stance” on crypto. Ripple’s Chief Legal Officer Stuart Alderoty added that despite what Chair Gensler may purport, the SEC didn’t have the regulatory authority to label tokens as securities.