Coinbase Claims it Will be ‘Net Beneficiary’ Amid Increased Regulatory Scrutiny
On Tuesday, Crypto exchange Coinbase addressed the present regulatory landscape in its earnings report for the final Quarter of 2022. The firm claims it’s in a strong position to handle future and existing challenges because it has developed a reliable infrastructure, transparency with government authorities and customers, and a strong balance sheet.
The exchange sales in its fourth quarter totaled around $604 million. Many crypto analysts, including FactSet, had anticipated that Coinbase earnings would range between $550 million and $585 million.
Coinbase says one of its competitive advantages over rivals is its rigorous evaluation process of cryptocurrencies before listing on the platform. The exchange reports that over 200 tokens were rejected last month for failing to meet the listing requirements.
Further, Coinbase expects increased regulatory focus this year; however, its leadership believes that the exchange’s strong foundation will make the firm a net beneficiary of the new environment.
Coinbase Vs Regulators
The Securities and Exchange Commission is still investigating Coinbase for alleged securities law violations. The commission claims that the exchange has been offering US citizens cryptocurrencies that are not registered as securities.
However, Coinbase insists that its staking service and USDC are not securities, so it doesn’t believe it is violating any laws.
The exchange also said it has always worked as quickly as possible to remediate any issue immediately after it’s identified. For example, Coinbase recently paid $100 million in fees to settle with the New York Department of Financial Service (NYDFS).
NYDFS had accused the exchange of violating state regulations and New York Banking Law in regard to digital currencies, cybersecurity, transaction monitoring, and money transmitting. However, the Department reports that Coinbase is already improving its practices.
Coinbase Wants to Participate in Policy-Making Process
Coinbase has expressed its readiness to work with policymakers and regulators around the world to establish sensible regulations for the crypto industry. But the exchange is disappointed by US regulators who appear not to welcome public participation in the rule-making process.
According to the exchange, engaging crypto players before enforcing any policy is important for any regulator seeking jurisdiction in the industry.
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