Coinbase CEO on US crypto regulation, SEC lawsuit, international plans

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Brian Armstrong, co-founder and chief executive of Coinbase Inc., speaks at the Singapore Fintech Festival, in Singapore, November 4, 2022.

Bryan van der Beek | Bloomberg | Getty Images

Head of cryptocurrency exchange CoinbaseBrian Armstrong doubled down on his criticism of US Securities and Exchange Commission chief Gary Gensler on Monday, but said the exchange would not leave the US despite the regulatory uncertainty the company faces in the country.

Coinbase has been under intense regulatory scrutiny in the US recently after a bleak year for the crypto industry that saw major companies like FTX and Terra fail, prices plummet, and investors lose billions of dollars in the process. .

The SEC earlier this year issued Coinbase with a Wells Notice, a letter that the regulator sends to a company or companies at the end of an SEC investigation that says the SEC intends to take enforcement action against them.

At the heart of the regulator’s dispute with Coinbase, and several other crypto companies, is the allegation that it is selling unregistered securities to investors. Coinbase disputes this.

“The SEC is a little more isolated here,” Armstrong told CNBC’s Dan Murphy in an interview in Dubai on Monday. “There’s kind of a crusade, if you will, with Gary Gensler, the chairman there, and he has taken a more anti-crypto stance for some reason.”

“I don’t think he’s necessarily trying to regulate the business so much as maybe cut it down. But he’s created some lawsuits, and I think that it is very unhelpful to the industry in the US which is writ large, but it is also an opportunity for Coinbase to get that clarity from the courts that we feel will be very beneficial to the crypto industry and also the US in general.”

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The SEC was not immediately available for comment when contacted by CNBC.

Armstrong also referred to a suggestion he made last month that the company might be forced to move its headquarters overseas.

“Coinbase is not going to move overseas,” Armstrong said. “We’ve always had a US presence … But the US is a bit behind right now.”

“I would say that we see more sensible approaches, for example, in the EU [European Union]they’ve really adopted comprehensive crypto legislation, the UK has been very welcoming, and for us there, and that’s been the hub where we’ve decided to serve the UK market.”

At a fintech conference in London in April, Armstrong said that Coinbase could consider a move outside the US if the current regulatory headwinds persist. He said that the US “has the potential to be an important market in crypto” but currently does not provide regulatory clarity.

If this goes ahead, he said, Coinbase would consider options to invest more abroad, including moving from the US to other places.

However, Armstrong said on Monday that Coinbase was looking to increase its international investments, saying that it has a “great interest” in the United Arab Emirates as a country to invest more in. Dubai has been a very favorable regulator when it comes to crypto, courting business from the likes of Binance and Kraken.

Noting that this is his first visit to the UAE, Armstrong said: “I’m here to learn and listen and meet the relevant regulators both in Abu Dhabi and here in Dubai and co – decide if this is a good place for us to serve him. a large area of ​​the world.”

The UAE is issuing a 'clear rule book' on cryptocurrency regulation, Coinbase CEO says
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