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Coinbase CEO Brian Armstrong remains unfazed by the recent lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against his exchange.
On Monday, both the CEO and his company provided succinct arguments regarding why they believe Coinbase will prevail in its legal confrontation with the regulator.
An Opportunity for Clarity
In a tweet on Tuesday, Armstrong expressed that Coinbase would be “proud” to advocate for the crypto sector in its legal proceedings with the SEC, aiming to “finally achieve some clarity regarding crypto regulations.”
Armstrong has criticized the SEC for years for its lack of clarity on how securities laws pertain to the crypto sector, including which digital assets are classified as securities and which as commodities. The exchange initiated legal action against the SEC in April for its failure to respond to Coinbase’s request for regulations concerning digitally traded securities, while the regulator asserted that clear rules and regulations for crypto already exist.
One of the primary accusations from the SEC is that Coinbase has not registered with the agency for various securities offerings it provides. However, Armstrong contended that there is no feasible way to accomplish this.
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“We attempted, multiple times – hence we don’t list securities,” he stated. Additionally, the SEC and CFTC have issued conflicting statements regarding which crypto assets are deemed securities – including Ethereum (ETH) and Tether (USDT).
The U.S. Congress is already working on introducing legislation specific to crypto to address the issue, yet this still leaves the country lagging behind “the rest of the world” in terms of regulatory framework development.
“We’ll complete the task,” he remarked. “In the meantime, let’s continue to progress and innovate as an industry. America will ultimately get this right.”
The Figures
In a video released by Coinbase on Tuesday, the exchange shared statistics to demonstrate its dedication to regulatory compliance and the SEC’s lack of cooperation.
The exchange highlighted that it referenced its “staking” 57 times in its S1 report, which the SEC approved. It also engaged in 30 private meetings with the SEC seeking guidance on maintaining legal compliance.
In contrast, the SEC has not established any comprehensive rules regarding crypto and relies on a test formulated in 1946 to assess whether tokens are securities (the Howey Test).
However, critics of Coinbase noted that the SEC made it clear in its approval of the exchange’s S1 that it did not necessarily endorse the legality of Coinbase’s underlying operations.
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