The CEO of Coinbase, Brian Armstrong, has expressed the need for regulatory clarity in the crypto industry, emphasizing the role of Congress or case law in providing a definitive framework for the sector.
In an interview with The Wall Street Journal, Armstrong highlighted the challenges faced by Coinbase as it finds itself caught in the middle of a power struggle between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
One of the key areas of contention between the two regulatory bodies is the classification of assets like Ethereum. While the SEC considers them securities, the CFTC views them as commodities. This lack of consensus has created a state of uncertainty and ambiguity for market participants, prompting Armstrong to call for legislative intervention.
According to Armstrong, the current situation leaves room for interpretation and hampers the growth of the sector. He argued that Congress must step in and pass legislation that provides a clear regulatory framework for cryptocurrencies. Until that happens, he suggested that the industry would have to rely on case law from litigation, such as the recent SEC case against Coinbase.
To support his stance, Armstrong asserted that Coinbase only lists crypto commodities and rejects around 90% of evaluated tokens.
He claimed that every asset listed on the exchange undergoes rigorous analysis and scrutiny by the company's listing committee, which comprises what he considers the "best legal minds in the world." Coinbase's evaluation process includes assessing whether a token should be classified as a commodity or a security.
Interestingly, Armstrong revealed that Coinbase had sought clarification from the SEC on whether specific cryptocurrencies could be listed but received no response. As a result, the exchange developed its own internal process to make listing decisions, which relied on the expertise of its committee.
When discussing the future of the crypto industry in the United States, Armstrong expressed optimism that the "right outcome" would eventually be reached. He believes that any court decision, even if it takes years to materialize, would be a step in the right direction.
In addition to the judiciary, he highlighted the potential role of Congress or the 2024 presidential election in shaping the regulatory landscape for cryptocurrencies.
Coinbase will continue to rely on its own evaluation process and the expertise of its listing committee. Armstrong remains hopeful that the United States will ultimately arrive at the "right outcome" for the crypto industry, whether through court decisions, legislative action, or the upcoming presidential election.
