By Brenda Collins
In recent reports, Coinbase CEO Brian Armstrong has emphasized the critical need for regulatory clarity in the U.S. cryptocurrency industry. He stated that the clarity can be achieved through Congressional action or the development of case law, as reported by The Wall Street Journal.
According to the report, Armstrong highlighted there is an incessant power tussle between the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission), with Coinbase finding itself caught in the middle of their dispute.
Furthermore, In the past, there has been a lack of agreement between the SEC and CFTC regarding the classification of specific cryptocurrencies. The CFTC views cryptocurrencies like Ethereum as commodities, whereas the SEC considers them securities.
Hence, due to the conflicting stances taken by these regulatory bodies, Brian Armstrong argued that it is crucial to have clarity on the matter. He emphasized the need for Congress to step in and pass legislation that would establish a definitive regulatory framework.
Regulatory Clarity Is Essential For Crypto Industry Growth
This framework would provide clear guidelines on how cryptocurrencies should be classified and regulated. As the industry awaits the enactment of legislation, Brian Armstrong highlighted the industry’s reliance on case law, including ongoing lawsuits such as the SEC’s case against Coinbase.
The CEO emphasized that these legal proceedings will play a significant role in shaping the regulatory environment and offering guidance until formal regulations are implemented. In line with this, Armstrong, the CEO of Coinbase, stated that the assets listed on their platform are regarded as crypto commodities rather than securities.
Also read:Coinbase has contested the SEC’s lawsuit, which asserts that thirteen assets listed on their platform are securities. Brian Armstrong clarified that Coinbase carries out a meticulous evaluation of tokens before listing them, rejecting approximately 90% of the reviewed assets.
The listing process involves a rigorous analysis that includes a comprehensive assessment of each asset. Armstrong himself firmly holds the belief that the tokens listed on Coinbase should be classified as commodities rather than securities.
Coimbase Is Optimistic Despite Pressure From Regulators
Armstrong highlighted that Coinbase regularly sought guidance from the SEC regarding the suitability of specific tokens for listing. However, as the exchange did not receive any feedback from the SEC, it had to develop its listing process.
Coinbase established a digital asset listing committee comprising legal experts responsible for thoroughly reviewing tokens before listing. The committee meticulously evaluates a range of factors, including conducting legal analysis, to determine whether the tokens should be classified as commodities or securities.
Before its initial public offering, Coinbase shared its framework for distinguishing between crypto securities and commodities with the SEC. However, the SEC’s failure to respond prompted Coinbase to rely on its internal listing committee, which Armstrong regards as consisting of some of the most knowledgeable legal professionals globally.
Despite the challenges, Armstrong maintains optimism that the United States will ultimately reach a favorable resolution for cryptocurrencies. He believes that any form of clarity the courts provide, regardless of the ultimate decision, would be a positive step forward.
Armstrong anticipates that the “right outcome” may arise from court rulings, the passing of legislation by Congress, or even following the presidential elections in 2024. However, Coinbase keeps up the fight in the ongoing lawsuit the SEC launched against it.
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