The US Securities and Exchange Commission (SEC), according to Coinbase CEO Brian Armstrong, is the only government agency that refuses to meet with the company after it went public in April.
Armstrong noted on Anthony Pompliano’s Best Business Show on Sept. 24 that the SEC was the “only regulator” who declined to meet with him during his visit to Washington after Coinbase went public in April:
“I reached out to the SEC. I tried to get a meeting with them. They told me that they weren’t meeting with any crypto companies.”
“I was startled because there are so many different regulators out there,” says the author. Every single one of them has been eager to meet with us and other branches of government,” he continued.
Armstrong raised his firm’s concerns about the SEC’s approach earlier this month, revealing that the regulator had threatened to prosecute the company if it established a USD coin (USDC) loan scheme with 4% annual rates.
Despite the fact that other companies were already providing identical services, he claimed the SEC declined to approve the program because it was regarded as security, but he offered no explanation as to how it arrived at that determination.
During the interview with Pomp, the Coinbase CEO stated that the SEC’s position has not altered since then and that they had not even called the company. Armstrong enquired:
“How are they protecting consumers in this case? I think a lot of consumers demonstrably have wanted to earn higher yields on their savings accounts. They’re not really getting those products from the existing financial services.”
“That was one unanswered question. The second question was, “How are they establishing a level playing field?” he added.
Coinbase considered taking the SEC to court, according to Armstrong, but decided it was not worth the time and expense, not least because “the court system gives a lot of deference to regulators.”
The company has now cancelled its plans to start the program and will instead wait until the regulatory situation surrounding crypto lending services improves:
“We’re going to wait and see what the SEC does in terms of the other products that are out there already in the market where it’s not a level playing field today.”
“I think we want to focus our attention on maybe even more important things happening in crypto, like the questions around whether of these tokens are securities and how DeFi will be used?” he continued.
Crypto heads to Washington.
When it comes to how policymakers view cryptocurrency, Armstrong says there’s a 50/50 divide in Washington between those who believe it’s risky and those who believe it’s an opportunity:
“You know, 50% of the people I talked to in DC, roughly, they’re still thinking of crypto as a risk. They think this is scary. This is dangerous. They have all kinds of misconceptions in their head about the percentage of activity that’s for illicit activity.”
“So that’s probably half of the people I meet in D.C., and the other half see this as a wonderful opportunity,” he continued.
On September 22, Armstrong spoke at the TechCrunch Disrupt conference, revealing that Coinbase is working on a draft regulatory framework that it will present to US lawmakers next month.
The firm hopes to serve as an “advisor” who can fight for “reasonable regulation,” with Armstrong stating that regulators had requested the firm for a crypto proposal on many occasions.
