Legal experts, including Ripple lawyer John E. Deaton, share Armstrong’s optimism, speculating that Coinbase will be a significant beneficiary of Binance’s regulatory challenges.
Recent developments have thrust Coinbase Global Inc (NASDAQ: COIN) into the spotlight, positioning it as the frontrunner following regulatory challenges faced by its main rival, Binance.
The collapse of FTX had already reshaped the crypto industry, and now, with Binance capitulating to the United States Department of Justice (DoJ), Coinbase seems poised to take advantage of the shifting tides.
Coinbase’s Strategic Advantage
The turning point for Binance came with its CEO, Changpeng ‘CZ’ Zhao, officially stepping down as part of the exchange’s agreement with the DoJ. In his place, Richard Teng, former Global Head of Regional Markets, was named the new CEO. This transition has opened the door for Coinbase to emerge as a clear leader in the cryptocurrency exchange space.
Brian Armstrong, the CEO of Coinbase, wasted no time in seizing the opportunity presented by Binance’s troubles. He emphasized the importance of the United States as the rightful hub for cryptocurrency activities, stating, “We now have an opportunity to start a new chapter for this industry…Americans should not have to go to offshore unregulated exchanges to benefit from this technology.”
Armstrong’s confidence in the US regulatory framework is rooted in Coinbase’s long-term commitment to compliance. Since its founding in 2012, Coinbase has taken a proactive approach, obtaining licenses, building compliance and legal teams, and prioritizing transparency. The company went public in 2021, further solidifying its commitment to trust and adherence to regulations.
In the wake of Binance’s regulatory challenges, Coinbase’s stock (COIN) experienced a surge, climbing at least 5%. The news of Binance’s CEO change has prompted Ripple’s Chief Legal Officer, Stuart Alderoty, to comment on the necessity of resolving anti-money laundering violations to bring the crypto industry into compliance with crucial laws and safeguards.
Bitcoin Spot ETFs and Potential Coinbase Role
Legal experts, including Ripple lawyer John E. Deaton, share Armstrong’s optimism, speculating that Coinbase will be a significant beneficiary of Binance’s regulatory challenges. Deaton’s speculation is driven by the growing narrative around Exchange-Traded Funds (ETFs), with Coinbase playing a central role.
The Bitcoin spot ETF applications of major institutional players such as BlackRock Inc (NYSE: BLK), Chicago Board Options Exchange (CBOE), Fidelity Investments, and Vanguard feature Coinbase, with a Surveillance Sharing Agreement (SSA) listed on Nasdaq’s 19b-4 form
The SSA plays a crucial role in addressing the SEC’s concerns about conflicting activities and limited monitoring in cryptocurrency exchanges. If approved, the Bitcoin spot ETFs would enable institutional players to share trade data with the SEC. This potential approval could further solidify Coinbase’s position as a key player in the US crypto market.
In the broader crypto community, TRON founder Justin Sun has extended a congratulatory message to Binance’s new CEO, Richard Teng, expressing confidence in Binance’s ability to enter a new chapter and achieve new successes. Sun also expressed a willingness to continue collaboration, driving development and innovation together.