Coinbase CEO 'Confident' With 'Facts And Law,' Slams SEC Suit As 'Regulation By Enforcement'

Coinbase, the prominent American cryptocurrency exchange platform, remains undeterred by the recent lawsuit filed against it by the US Securities and Exchange Commission (SEC). Brian Armstrong, one of the founders of Coinbase, expressed confidence in their position, claiming it is a "regulation by enforcement approach" and that he is "confident with our facts and the law."

The SEC's legal action came just a day after the regulatory body levied 13 charges against Coinbase, which boasts the highest trading volume among global cryptocurrency exchanges. In its lawsuit on Tuesday, the SEC accused Coinbase of operating as an unregistered exchange and broker. The SEC demanded that Coinbase be permanently restrained from engaging in such activities. The regulator labeled the 13 assets listed on Coinbase's exchange platform as crypto asset securities.

In a press release announcing the lawsuit, the SEC alleged that Coinbase had unlawfully facilitated the buying and selling of these securities, amassing billions of dollars since 2019.

"The SEC alleges that Coinbase intertwines the traditional services of an exchange, broker, and clearing agency without having registered any of those functions with the Commission as required by law," it added.

Armstrong shared a lengthy and gutsy tweet a few hours after news about the lawsuit broke out, assuring its customers and the broader cryptocurrency industry that Coinbase "will get the job done," and would go to court if it is what's needed to get clarity on regulations but still optimistic that "America will get this right in the end."

According to the CEO, Coinbase is "proud to represent the industry in court to finally get some clarity around crypto rules," claiming that "instead of publishing a clear rule book, the SEC has taken a regulation by enforcement approach that is harming America."

Armstrong also pointed out that the lawsuit against Coinbase is centered on what is a security and what is not, which he said is very different from what the regulators previously charged other crypto companies with.

"In case it's not obvious, the Coinbase suit is very different from others out there – the complaint filed against us is exclusively focused on what is or is not a security. And we are confident in our facts and the law," the CEO said.

Additionally, Armstrong shared four important facts regarding the allegations made by the SEC. Firstly, he pointed out that Coinbase underwent a thorough review by the SEC, allowing the company to go public in 2021. Secondly, he clarified that Coinbase had attempted multiple times to register with the SEC but was unsuccessful. As a result, Coinbase refrains from listing securities and rejects the majority of assets it reviews.

Moreover, Armstrong underscored the conflicting statements between the SEC and the Commodity Futures Trading Commission (CFTC) regarding the classification of securities and commodities. He mentioned that the U.S. Congress is introducing new legislation to address this discrepancy, while other countries are implementing clear rules to support this technology.

The SEC's lawsuit against Coinbase represents a significant development in what appears to be an ongoing crackdown by the financial regulator on the emerging cryptocurrency industry.