Coinbase CEO Brian Armstrong has called for the next US Securities and Exchange Commission (SEC) chair to address the agency’s perceived inconsistencies in its approach to digital assets.
Armstrong’s criticism stems from the securities regulator’s shifting stance throughout the years which has caused frustration within the community.
SEC’s Contradictions on Crypto
His tweet, which accompanied a compilation of conflicting SEC statements on the issue, argued that the new chair should “withdraw all frivolous cases and issue an apology to the American people.” Armstrong laid out several examples of the SEC’s evolving position.
In 2018, the SEC stated that a digital asset “all by itself is not a security.” However, in 2021, the regulator declared that a digital asset “embodi(es)” and “represents the investment contract.” This is followed by three contradictory statements in 2024 alone.
For instance, in February 2024, the SEC stated a digital asset is “just computer code.” Then, five days later, it said the digital asset “itself ‘represents the investment contract.'” Finally, eight months later, the SEC declared the digital asset “itself ‘is not’ the security.”
The agency has also been inconsistent in determining whether Bitcoin is considered a security. In 2023, it stated that “(T)he SEC has never claimed (Bitcoin) is a security.” However, in 2024, the agency asserted “Maybe ‘(T)here’s not an answer.'” Notably, just four days later, it took yet another stance, proclaiming “‘(T)hat’s not a security.'”
The Coinbase CEO’s demand for an apology and withdrawal of “frivolous cases” reflected a broader sentiment within the community, which has long accused the SEC of overreach and a lack of clarity in its regulatory approach. Armstrong believes that restoring trust in the agency is crucial, as the damage done to the country’s financial landscape cannot be easily undone.
Shift in Leadership with Election Looming
The comments come at a crucial moment, with the US presidential election just around the corner. The Democrats have developed a reputation for their hostility towards cryptocurrency, an approach that many fear could undermine the US dollar’s status as the world’s dominant global reserve asset. Throughout her presidential campaign, Kamala Harris has made very few remarks on crypto-related issues.
On the other hand, Donald Trump has managed to curry favor with the crypto community this year. Most recently, he pledged to terminate Gensler’s tenure on his first day if re-elected and vowed to appoint a chair who believes that America should “build the future, not block the future.”
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