Coinbase CEO Stands by Decision to Comply with U.S. Licensing Laws Amid Binance Legal Woes
Summary:
Brian Armstrong, CEO of Coinbase, defended his company's adherence to U.S. money transmitter licensing laws, considering it vital for its long-term success and standing amid competition. He acknowledged that this approach hindered speedy growth but reemphasized its importance for legal and trust-related reasons. Armstrong also expressed concern about the perceived regulatory ambiguities in the U.S. driving clients to offshore platforms. However, he saw hope in the resolution of rival Binance's legal problems, potentially paving the way for improved regulatory clarity.
The CEO of cryptocurrency exchange Coinbase, Brian Armstrong, has declared his support for his company's decision to adhere to U.S. money transfer licensing regulations. Via a social media post on November 21, Armstrong shared his thoughts on rival exchange Binance's upcoming admission of guilt in a criminal case, saying he was pleased that Coinbase chose to become licensed as money transmitters, even if it put them at a competitive disadvantage. Armstrong stressed that from its inception in 2012, Coinbase has had a long-term strategy.
Armstrong stated that he knew licensing and compliance were essential for the company to sustain the test of time. He explained that they had acquired the necessary licenses, set up compliance and legal departments, and highlighted the basis of their brand to be trust and adherence to laws.
He acknowledged that the pursuit of compliance had curtailed the company's speedy growth, as it's a steeper, pricier path to follow a compliant approach. However, he stated that they could not adopt a faster pace like their business competitors, further supporting the correctness of their approach because they upheld the law.
Armstrong expressed his concern about perceived ambiguities in U.S. regulations, arguing it is driving clients towards overseas platforms like Binance. In his view, he considered it wrong for Americans to resort to unlicensed offshore exchanges to leverage this technology. Nevertheless, on a hopeful note, he said that Binance's criminal case resolution in the U.S. may pave the way for better regulatory clarity.
Armstrong has previously pointed out that unclear U.S. regulations have led to approximately 95% of crypto transactions moving offshore. The Securities and Exchange Commission has lodged a legal action against Coinbase for alleged breaches of U.S. securities laws. However, these allegations don't connect to infringements of the Bank Secrecy Act or issues about money transmitting licenses.
On November 21, the Justice Department announced that Binance concurred to admit guilt to violations of the U.S. Bank Secrecy Act, along with serving U.S. clientele without gaining the necessary money transmitting licenses.
Published At
11/21/2023 9:46:09 PM
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