In a fiery response to the recent lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Coinbase, CEO Brian Armstrong defended the cryptocurrency exchange and criticised SEC Chair Gary Gensler, whom he referred to as an “outlier.” Armstrong also reassured Coinbase customers that their funds were secure.
The SEC lawsuit, filed on Tuesday, alleges that Coinbase traded at least 13 cryptocurrencies that should have been registered as securities, including tokens like Solana, Cardano, and Polygon. Furthermore, the agency accuses Coinbase of operating as an unregistered exchange, broker, and clearinghouse.
Brian Armstrong actively pushes for clearer regulations surrounding cryptocurrencies
Armstrong, known for his vocal criticism of the SEC, has been actively advocating for clearer regulations surrounding cryptocurrencies. Speaking at a Bloomberg conference, he revealed that Coinbase had approached the regulator to explore registration, but the initial meeting with Gensler resulted in an “icy reception.”
Gensler has consistently maintained that most tokens qualify as securities and has emphasized the SEC’s authority over the crypto market. The U.S. President’s Working Group on Financial Markets has also suggested that certain tokens linked to fiat currencies might be considered securities.
However, crypto companies, including Coinbase, have disputed the classification of crypto tokens as securities and have repeatedly called for the SEC to establish unambiguous guidelines for the industry.
“The SEC chair is really an outlier,” Armstrong stated, highlighting that several lawmakers he had engaged with were supportive of developing a clear regulatory framework for the technology.
Market Response: Coinbase Shares Rebound
Following Armstrong’s comments, Coinbase shares rebounded on Wednesday, rising by approximately 3.1% to reach $53.2.
A spokesperson for the SEC declined to comment on the matter. Moreover, the CEO wasted no time drawing distinctions between the SEC’s lawsuit against Coinbase and the recent lawsuit against Binance, the world’s largest cryptocurrency exchange.
Further, Armstrong emphasised that the two cases were fundamentally different and highlighted that Coinbase had not faced allegations of misappropriating customer funds.
As the legal battle between the exchange and the SEC continues, the cryptocurrency industry awaits further developments and hopes for the establishment of comprehensive regulatory guidelines that will provide clarity and stability for market participants.
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