2024

when

Coinbase CEO Brian Armstrong has pointed out the U.S. Securities and Exchange Commission (SEC), urging the next chairman to let go of what he sees as ‘frivolous cases’, as well as apologize to the public for the inconsistent handling of cryptocurrency mounting by the agency.&nbsp;<a href="https://x.com/brian_armstrong/status/1851103674744832334" rel="nofollow" target="_blank">He stated</a>: 
<blockquote>
 “The next SEC chair should withdraw all frivolous cases, and issue an apology to the American people. It would not undo the damage done to the country, but it would start the process of restoring trust in the SEC as an institution.”&nbsp;
</blockquote> 
<img loading="lazy" loading="lazy" decoding="async" class="aligncenter wp-image-53959 size-full" src="https://thebitjournal.b-cdn.net/wp-content/uploads/2024/10/0B857336-1674-40D9-B314-0837568BC39D.jpeg" alt="Coinbase CEO Urges SEC Chairman To Drop “Frivolous Cases” = The Bit Journal" width="728" height="90" title="Coinbase CEO Urges SEC Chairman To Drop “Frivolous Cases” 53"> 
His remarks come amid a worsening mood among the crypto community over the SEC’s regulatory posture. Armstrong’s call for reform comes at a time when the SEC has entrenched itself in a series of binary options that don’t exist when it comes to digital assets.&nbsp; 
<h2 id="span-style-font-weight-400-coinbase-faces-legal-conflict-over-sec-s-securities-claims-span">Coinbase Faces Legal Conflict Over SEC’s Securities Claims</h2> 
<img loading="lazy" loading="lazy" decoding="async" class="aligncenter wp-image-65159 size-full" src="https://thebitjournal.b-cdn.net/wp-content/uploads/2024/10/a-photo-of-the-coinbase-headquarters-with-a-large-obr5tUzzTOqSikZ7JeZb0w-chhfwW15TjGRbn66J_If9A.jpeg" alt="Coinbase CEO Urges SEC Chairman To Drop “Frivolous Cases” " width="1312" height="736" title="Coinbase CEO Urges SEC Chairman To Drop “Frivolous Cases” 54"> 
Armstrong also included on his post a table showing the agency’s contradictory statements on key regulatory questions. For example, in the case of 2018, the SEC stated that a digital asset, all on its own, ‘is not a security.’ But this evolved over time with the agency in 2021 proposing that some digital assets should hold the form of investment contracts and in 2024 flip-flopping whether they should be referred to as computer code or securities. 
There is regulatory heterogeneity pertaining specifically to tokens like Bitcoin. In 2023, the SEC claimed that Bitcoin was not a security, but statements later in 2024 took the industry into a state of ‘regulatory limbo.’ This lack of clarity not only stifles innovation but also discourages companies from fully investing in the U.S. market, writes Armstrong. 
The ongoing legal battle between Coinbase and the SEC is just another example of the tensions that come from playing arbitrage in a completely unregulated space. The suit was filed against the exchange by the SEC in June 2023, which accused the exchange of being an unregistered securities broker. Coinbase, however, has argued that several digital assets it has are not securities and, therefore, do not need the SEC’s approval. 
Armstrong described the SEC’s approach as “regulated by enforcement” and said that the agency has not offered regulatory guidance to help firms maneuver through this complex landscape. After trying to talk to the SEC to gain some clarity, Coinbase has gotten no help, forcing the exchange to assert its right to operate under existing laws. 
<h2 id="span-style-font-weight-400-sec-s-heavy-handed-tactics-stifling-crypto-growth-and-innovation-span">SEC’s Heavy-Handed Tactics Stifling Crypto Growth And Innovation</h2> 
<img loading="lazy" loading="lazy" decoding="async" class="aligncenter wp-image-65155 size-full" src="https://thebitjournal.b-cdn.net/wp-content/uploads/2024/10/SEC-2.webp" alt="Coinbase CEO Urges SEC Chairman To Drop “Frivolous Cases” " width="1312" height="736" title="Coinbase CEO Urges SEC Chairman To Drop “Frivolous Cases” 55"> 
As industry leaders, including Armstrong, turn the call for legislative action, Congress becomes increasingly tempted to take the reigns of crypto regulation. Armstrong posits that digital assets present unique challenges which can not be accommodated by the existing regulatory framework. If the situation remains opaque, innovation and talent could leave the U.S. for friendlier crypto jurisdictions abroad, warns. 
A wider dissatisfaction among crypto community feels that under the heavy hand of the SEC, crypto inspired growth and innovation is stifled. A dramatic change in attitude towards regulatory compliance has played out before the industry’s eyes, with many stakeholders even advocating for a clearer and more collaborative setting for regulations. 
The story of cryptocurrency regulation will continue to centre around the SEC. Armstrong calls for the regulators and the crypto industry to engage in constructive dialogue. As the next SEC chairman is set to rise to the role, reform may be just around the corner, and the opportunity to build a new regulatory house for digital assets in the US could materialize. 
<h2 id="span-style-font-weight-400-conclusion-span">Conclusion</h2> 
Brian Armstrong is demanding that the next Secretary of the SEC give up “frivolous cases” and apologize clear regulation in crypto is needed urgently. Given the onslaught of inconsistent guidelines, a move toward positive dialogue and congressional action could allow the industry to spur innovation and return the U.S. to its position as the world’s leading market. 
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Coinbase CEO Urges SEC Chairman To Drop “Frivolous Cases”

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The Bit Journal

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