Coinbase CEO trusts Congress to create clear rules for crypto firms but lacks faith in the SEC
During a Q1 earnings call, Coinbase CEO Brian Armstrong reassured investors that the cryptocurrency exchange has no intentions of moving its operations out of the United States.
Coinbase’s CEO, Brian Armstrong, stated during an investor call on May 5th that the company is fully dedicated to the U.S. market for the foreseeable future, despite regulatory ambiguity in the country.
Armstrong stated that Coinbase is completely dedicated to the U.S. market and he founded the company in the U.S. because he believes that rule of law is upheld here. He also expressed optimism that the U.S. will make the right decisions regarding regulations.
Armstrong is confident that the U.S. Congress will soon create a clear set of rules for crypto firms to follow, which gives him optimism.
“Armstrong expressed confidence in Congress passing new legislation to create a clear set of rules for crypto firms to follow, citing strong bipartisan support”.
Armstrong’s comments were not completely positive.
Armstrong is worried about the Securities Exchange Commission’s (SEC) unpredictable enforcement action. Coinbase was served with a Wells Notice by the SEC in late March.
“Armstrong stated that the Securities Exchange Commission has not been clear about its concerns with Coinbase despite ongoing engagement, so he can’t speculate much about the situation”.
Armstrong also added that it is hard to determine when any possible SEC litigation might occur.
Coinbase faced regulatory troubles that led them to file a lawsuit in a US federal court. The lawsuit was filed to urge the Securities Exchange Commission to answer a petition that had been pending since July.
Today, to provide greater transparency in our long-standing engagement with the SEC, we are sharing our response to the Wells notice we received last month. https://t.co/aquuWmxmRM
— Coinbase 🛡️ (@coinbase) April 27, 2023
Many people thought Coinbase was trying to move away from the U.S. when it launched Coinbase International Exchange (CIE) on May 2.
Coinbase’s new exchange, Coinbase International Exchange (CIE), is available to customers in 30 countries around the world, including Singapore, Hong Kong, El Salvador, the Philippines, Thailand, and Bermuda. CIE has obtained a license from Bermuda to operate in the country.
Today Coinbase launched Coinbase International Exchange @CoinbaseIntExch and will begin by offering BTC & ETH perpetual futures settled in USDC with up to 5x leverage to institutional clients in eligible jurisdictions outside of the U.S.https://t.co/OzhbgJlZ2K
— Coinbase 🛡️ (@coinbase) May 2, 2023
Armstrong mentioned that the European Union is making more regulatory progress than the U.S. with their Markets in Crypto Assets (MiCA) legislation, which is expected to come into effect in mid-2024 or early 2025.
According to Armstrong, the European Union has made significant progress in terms of crypto regulation, with the adoption of comprehensive legislation called MiCA that creates a single, clear set of rules for the entire region.
Armstrong mentioned that during his recent trips to the United Kingdom and Washington D.C., he saw draft bills being developed that focused on stablecoins and market structure. He also noted that Singapore, Hong Kong, Australia, and Brazil were moving in a similar regulatory direction.
In Q1, Coinbase’s revenue rose by 22% and it managed to reduce its net loss from $475 million to $79 million. This happened as the CEO shared his views on the regulatory landscape for crypto firms.
Our Q1'23 financial results are in and our letter to shareholders can be found on the Investor Relations website at 🔗 https://t.co/8ovHEtPRgf pic.twitter.com/4iWAPGZNMh
— Coinbase 🛡️ (@coinbase) May 4, 2023
