Brian Armstrong, the CEO of Coinbase, recently spoke to The Wall Street Journal about the need for regulatory clarity in the U.S. crypto industry. According to him, clarity can only come from Congress or through case law. There is currently an ongoing power struggle between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) which Coinbase has been caught in the middle of.
The SEC and CFTC have contradicted each other in the past, with the former calling certain assets securities and the latter referring to them as commodities. Armstrong believes that until the two agencies can come to an agreement on the status of cryptocurrencies, clarity can only be obtained through regulatory legislation framed by Congress.
Coinbase was recently sued by the SEC, which claimed that thirteen of the assets listed on the platform are securities. Armstrong disputes these claims and states that Coinbase carefully reviews tokens before listing, rejecting 90% of those reviewed. The listing process involves rigorous analysis, said Armstrong, and there is a stack of paper for every asset listed on the exchange. He also feels that the tokens listed on Coinbase are commodities and not securities.
According to Armstrong, Coinbase constantly asked the SEC for guidance on what assets were “okay” to be listed, but never received any feedback from the agency. This forced the exchange to create its own process, which involved a digital asset listing committee that reviewed tokens for listing and considered several factors, including a legal analysis of whether they were commodities or securities.
Armstrong believes that any clarity from the courts, irrespective of the outcome, will be a step in the right direction. He is confident that even if it takes a few years, the U.S. will ultimately reach the “right outcome,” which could come from the courts, through Congress legislation, or after the 2024 presidential elections.