Coinbase CEO Brian Armstrong said During an interview on Bloomberg TV on Wednesday morning that the company’s goals align with those of the Securities and Exchange Commission (SEC), among which are to protect investors in the United States.
Armstrong explained that Coinbase has maintained a “good relationship” with several SEC staff members and commissioners and has had discussions with SEC Chairman Gary Gensler. The company plans to continue investing in these partnerships.
The CEO, however, said that although the company and the SEC have the same objectives, he wants to see crypto’s potential for financial industry innovation maintained.
Since FTX went bankrupt last November, regulators have been looking more closely at companies dealing with digital assets, sometimes taking enforcement actions against those suspected of violating securities laws.
NEW: Coinbase CEO Brian Armstrong joins @sonalibasak on Bloomberg TV after the biggest US cryptocurrency exchange posted a $557 million loss and saw revenue tumble 75% in the fourth quarter https://t.co/u3AMwlJ99A pic.twitter.com/lVdUWBdglM
— Bloomberg Crypto (@crypto) March 1, 2023
Earlier this month, the SEC charged the crypto exchange Kraken with a $30 million fine for not officially registering its staking-as-a-service product as a security. Kraken agreed to discontinue its US staking service as part of the settlement.
The SEC then moved on from a settlement with Kraken to investigate Coinbase’s staking offerings. The agency is reviewing whether Coinbase’s staking products qualify as securities under the US Securities Act.
Armstrong confirmed that the exchange had received subpoenas from the SEC as part of an investigation, but he insisted they were only requests for information.
Armstrong maintained that Coinbase’s staking product is not a security and has several differences from Kraken’s offering. He explained that Coinbase’s clients do not need to transfer ownership of their digital assets to the company when using its staking services. He clarified that Coinbase simply offers a service that enables them to participate “in staking, which is a decentralized protocol.”
WATCH: Coinbase CEO Brian Armstrong joins Bloomberg TV after the biggest US cryptocurrency exchange posted a $557 million loss and saw revenue tumble 75% in the fourth quarter https://t.co/zEfQ0mSMe0 https://t.co/dJAkxCtft8
— Bloomberg Markets (@markets) March 1, 2023
Armstrong’s clarification is in line with the statement issued by Coinbase’s chief legal officer, Paul Grewal, who informed shareholders last month that staking products on the exchange is not the same as the yield products under SEC scrutiny.