Coinbase CEO Rejects SEC Securities Charges, Calls for Clearer Regulation in Cryptocurrency Industry

The CEO of the U.S. compliant exchange Coinbase, Brian Armstrong, in an interview with The Wall Street Journal, discussed the recent regulatory challenges facing cryptocurrencies. In response to the SEC's accusation that the 13 cryptocurrencies listed on Coinbase are unregistered securities, Armstrong emphasized Coinbase's rigorous listing process and highlighted the need for clear regulations in the U.S. crypto industry, which may come from Congress or through court precedents.

Coinbase Has a Strict Listing Review Process

The U.S. Securities and Exchange Commission (SEC) sued Coinbase last week, alleging that 13 of the assets traded on Coinbase are securities, but Armstrong denied this claim.

Armstrong stated that because the SEC failed to provide a clear set of regulations, Coinbase had to establish its own process, forming a Digital Asset Listing Committee. The committee carefully reviews each token before listing, with over 90% of tokens being rejected after review.

Armstrong mentioned that the committee considers various factors before approving an asset listing, including legal analysis on whether they are commodities or securities, network security analysis on relevant smart contracts, and compliance reviews of the assets within the founding team. Therefore, the Digital Asset Listing Committee encompasses talents from different fields such as finance, internet, and law.

Armstrong also referenced the "Discussion Draft on Digital Asset Market Structure" released by the House Financial Services Committee last week, indicating an attempt to address the issue of whether crypto assets are commodities or securities.

Coinbase Differs from Binance, Industry Needs Clearer Regulation

The host also inquired about the differences between Binance and Coinbase regarding the SEC lawsuits they faced.

Armstrong deliberately avoided discussing Binance's issues, emphasizing that the complaints against Coinbase do not involve allegations of misappropriating customer funds or washing trades, but rather technical categorization of tokens as securities.

He expressed that regardless of the outcome, any clarification from the court would be a "step in the right direction." He is confident that the U.S. will ultimately reach the "right outcome," whether through the courts, congressional legislation, or post-2024 presidential elections.