By
Steve Muchoki
April 25th, 2024
While no particular country has gotten a perfect check when it comes to the evolution of digital currencies, some nations are arguably more advanced in terms of the regulation governing the industry than others.
Brian Armstrong, the CEO of Coinbase Global Inc (NASDAQ: COIN) has come out to criticize the regulatory authorities in the United States for failing to provide regulatory clarity, a situation that drives about 95% of trading activities offshore.
Armstrong’s comments come in response to a tweet from Senator Elizabeth Warren who said she will continue to push the United States Securities and Exchange Commission (SEC) to keep oversight on the industry in the wake of the collapse of the FTX Derivatives Exchange. In the Senator’s words quoting a report from the Wall Street Journal about the investigation into FTX, she said;
“The collapse of one of the largest crypto platforms shows how much of the industry appears to be smoke and mirrors. We need more aggressive enforcement and I’m going to keep pushing @SECGov to enforce the law to protect consumers and financial stability.”
The statement did not sit well with Brian Armstrong as he posited that US regulators should not be punishing American entities for the mistakes of a firm that operates offshore. He also pointed out that if the appropriate regulations and guidance had been put in place by the SEC, the market would have been more stable than it currently is.
“FTX.com was an offshore exchange not regulated by the SEC. The problem is that the SEC failed to create regulatory clarity here in the US, so many American investors (and 95% of trading activity) went offshore. Punishing US companies for this makes no sense,” he said in his tweet.
The investigations into FTX US go beyond the SEC and extend to the Commodity Futures Trading Commission (CFTC) as well as the Department of Justice (DoJ). According to media reports, the regulators are looking at whether the platform’s offerings constituted a security, its handling of customers’ funds, and its relationship with the embattled global company.
Coinbase CEO Comments Drew Comparisons with Singapore
While no particular country has gotten a perfect check when it comes to the evolution of digital currencies, some nations are arguably more advanced in terms of the regulation governing the industry than others.
One of these countries is Singapore.
Backing the comments of the Coinbase CEO, Brad Garlinghouse, the Chief Executive Officer of blockchain payments firm, Ripple Labs Inc drew comparisons between the regulatory landscape governing the crypto ecosystem in the US with those of Singapore.
“Brian is right – to protect consumers, we need regulatory guidance for companies that ensures trust and transparency. There’s a reason why most crypto trading is offshore – companies have 0 guidance on how to comply here in the US,” he said in a follow-up tweet, “Compare that with Singapore which has a licensing framework, token taxonomy laid out, and much more. They can appropriately regulate crypto b/c they’ve done the work to define what “good” looks like, and know all tokens aren’t securities (despite what Chair Gensler insists).”
Other key figures in the industry supported this position, underscoring the sentiment that more stakeholders want clear regulations for the crypto industry in the US.