Coinbase CEO on US Crypto Regulation, SEC Lawsuit, and International Projects

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Earlier this year, the SEC served Coinbase with a Wells notice. Coinbase CEO Brian Armstrong said the SEC was on a “lonely crusade” with Chairman Gary Gensler taking a “more anti-crypto view.” Armstrong went back on a suggestion he had made. last month that the company could be forced to move its headquarters overseas.

Brian Armstrong, co-founder and CEO of Coinbase Inc., speaks during the Singapore Fintech Festival, Singapore, November 4, 2022.

Bryan van der Beek | Bloomberg | Getty Images

Cryptocurrency exchange Coinbase CEO Brian Armstrong doubled down on his criticism of U.S. Securities and Exchange Commission chief Gary Gensler on Monday, but added that the exchange would not quit. not the United States despite the regulatory uncertainty the company faces in the country.

Coinbase has come under intense regulatory scrutiny in the US lately after a dismal year for the crypto industry that saw big companies like FTX and Terra fail, prices plunge and investors lose money. billions of dollars in the process.

Earlier this year, the SEC served Coinbase with a Wells Notice, a letter the regulator sends to a company or business at the end of an SEC investigation stating that the SEC plans to take legal action. against them.

At the heart of the dispute between the regulator and Coinbase, and a host of other crypto companies, is the allegation that it sells unregistered securities to investors. Coinbase disputes this.

“The SEC is a bit of an outlier here,” Armstrong told CNBC’s Dan Murphy in an interview in Dubai on Monday. “There’s kind of a solitary crusade, if you will, with Gary Gensler, the president there, and he’s taken a more anti-crypto view for some reason.”

“I don’t think he’s necessarily trying to regulate the industry as much as maybe reduce it. But he’s created lawsuits, and I think that’s pretty useless for the industry in the United States in its together, but it’s also an opportunity for Coinbase to go get that clarity from the courts that we think will really benefit the crypto industry and also the US more broadly.”

The SEC was not immediately available for comment when contacted by CNBC.

Armstrong also backtracked on a suggestion he made last month that the company might be forced to move its headquarters overseas.

“Coinbase is not going to move overseas,” Armstrong said. “We will always have an American presence… But the United States is a little behind right now.”

“I would say we are seeing more considered approaches, for example, in the EU [European Union]they’ve actually already passed comprehensive crypto legislation, the UK has been incredibly welcoming, and for us there, and it’s been a hub where we’ve decided to serve the UK market.”

At a fintech conference in London in April, Armstrong said Coinbase may consider moving outside of the United States if current regulatory headwinds persist. He said the United States “has the potential to be a significant crypto market,” but currently does not provide regulatory clarity.

If this continues, he said, Coinbase would consider options to invest more overseas, including moving from the United States to other countries.

Still, Armstrong said on Monday that Coinbase was looking to increase its international investments, saying he was “very interested” in the United Arab Emirates as a country in which to invest more. Dubai has been a particularly supportive regulator when it comes to crypto, courting firms like Binance and Kraken.

Noting that this was his first visit to the United Arab Emirates, Armstrong said: “I am here to learn, listen and meet with relevant regulators both in Abu Dhabi and here in Dubai and decide if this is a good place for us to serve a large region of the world.”

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