Armstrong touted Coinbase’s efforts at remaining in line with US compliance, while calling for regulatory clarity in the sector.
The CEO of Coinbase Brian Armstrong has commented on Binance’s regulatory issues, particularly Changpeng Zhao’s decision to step down as CEO. The Coinbase chief took to X to explain the exchange’s decision to follow rules and ensure compliance to build a “generational company that stood the test of time”.
Armstrong continued, noting that Coinbase got the appropriate licenses and hired compliance and legal teams to indicate that the brand prioritized earning customers’ trust and following rules. He added that the exchange became a public company in 2021 to “increase transparency and raise the bar on trust.” Unfortunately, following the rules meant that Coinbase could not expand as quickly as expected, and had to go through financial and other difficulties to maintain compliance.
The Coinbase CEO then seemed to shade Binance a little, pointing out that the exchange’s compliance approach was right. Referring to the circumstances that forced Zhao to step down, Armstrong wrote:
“Today’s news reinforces that doing it the hard way was the right decision. We now have an opportunity to start a new chapter for this industry. We took a lot of arrows operating here in the US due to the lack of regulatory clarity, and my hope is that today’s news serves as a catalyst to finally achieve that.”
Armstrong Posts Coinbase Compliance Efforts as CZ Steps Down as Binance CEO
The Coinbase CEO’s post came less than an hour before Zhao confirmed his decision to step down. As part of a deal involving Zhao pleading guilty to charges in Seattle federal court, the former CEO stepped down while Binance agreed to pay $4.3 billion in fines to the US Department of Justice (DoJ).
Armstrong however seemed to take shots at the problems with regulatory clarity in the US. According to the post, Americans should be able to enjoy crypto and blockchain under US law without running to unregulated agencies. Nevertheless, he expressed optimism, promising that Coinbase will stay in the country and see the US “eventually get this right”.
Armstrong has previously stated that most American investors have gone offshore. In a post last year, the Coinbase CEO said that 95% of trading activity went offshore because the SEC has not provided regulatory clarity. Armstrong was responding to a post from US Senator Elizabeth Warren describing most of the crypto industry as “smoke and mirrors” following the FTX collapse last year. Armstrong said it was unreasonable to punish US companies for the SEC’s failure to provide clarity, especially since “FTX.com was an offshore exchange not regulated by the SEC.”
Coinbase has locked horns with US regulators and is in a legal battle with the SEC. In June, the SEC indicted Coinbase in a New York federal court, claiming the exchange is operating as an unregistered national securities exchange and broker. The news spread only a few hours after the SEC also sued Binance for violating several rules.
Coinbase previously pointed out that none of its assets qualify as securities. Last month, the exchange challenged the regulator’s interpretation of securities and accused it of overstepping its authority.