Following the suit filed by the US SEC against Coinbase in a New York court today, Brian Armstrong, the CEO of Coinbase, has stated that the SEC lacks clear guidance on legislation for digital assets. The CEO mentioned that after reviewing the complaint filed against his company, Coinbase will represent the industry and seek clarity in court.
The lawsuit, filed in a New York court, alleges that Coinbase is offering services involving securities that were not registered under the laws of securities and that they are also combining the functions of brokers, exchanges, and clearing agencies, which are usually distinct in traditional securities markets.
Armstrong explained that in 2021, Coinbase received permission from the SEC to operate as a public company after a review of its business processes. He also stated that the SEC did not offer any pathway for Coinbase to register securities, so the company did not register any . The CEO stated in his reply, ”The SEC and CFTC have made conflicting statements and don’t even agree on what constitutes a security and what constitutes a commodity”.
He added that this situation has prompted the US Congress to introduce new legislation on managing and supporting digital assets in the crypto industry. However, he pointed out that the SEC is not addressing the situation properly. “Instead of publishing a clear rule book, the SEC has adopted a regulation-by-enforcement approach,” which is harming the US economy.
Armstrong added “We are confident in our facts and the law, as we are also willing to represent the industry in court”.
Prior to today’s filing against Coinbase, the SEC also sued Binance and its CEO, CZ, for running their businesses illegally within the US. Binance, its CEO, and its former Chief Compliance Officer were sued by the CFTC in April 2023 for allowing unauthorized trading of derivatives for US users.