- Coinbase CEO Brian Armstrong criticized the SEC for its inconsistent regulatory approach towards crypto assets and called for the next SEC chair to apologize
- Armstrong cited the SEC’s shifting definitions of whether cryptocurrencies are securities or not, as well as its changing stance on regulating crypto exchanges, as causing confusion and hindering innovation
- He endorsed pro-crypto Senate candidates and advocated for new SEC leadership that would provide clearer regulations to foster the crypto industry in the US
Coinbase CEO Brian Armstrong has strongly criticized the US Securities and Exchange Commission (SEC), calling for significant changes in its leadership. Armstrong suggested that the agency’s next chair should withdraw “frivolous” cases and issue a public apology for the regulatory damage inflicted on the American crypto industry.
SEC’s Inconsistent Regulatory Approach
Armstrong’s criticism focused on the SEC’s changing narratives around digital assets and crypto exchanges. For instance, in 2018 the SEC initially stated that digital assets like Bitcoin do not qualify as securities. However, by 2021 the agency shifted, claiming that digital assets could represent investment contracts, which means they can be treated as securities under specific conditions.
This frequent reclassification has created confusion, further compounded by the SEC’s stance in 2024 that digital assets are merely computer code, only to reverse itself within days by stating that they are investment contracts once more.
The SEC’s inconsistent regulatory tone extends to crypto exchanges. In 2021, the agency acknowledged a lack of regulatory authority over these platforms. But by 2022, it claimed to have broad congressional authority to oversee crypto exchanges, leaving crypto companies in regulatory limbo.
Calls for Regulatory Clarity and Reform
According to Armstrong, the next SEC chair must address this inconsistency and commit to clear, well-defined regulations to restore trust in the institution. Armstrong believes the next SEC chair should acknowledge these missteps and work toward policies that foster a fair and consistent regulatory framework.
Amid regulatory backdrops, Armstrong has recently endorsed pro-crypto Senate candidates to achieve a more crypto-friendly regulatory environment. He contends that electing pro-crypto officials could foster regulatory reform and facilitate a more constructive relationship between the crypto industry and government agencies.
Conclusion
The possibility of a leadership change at the SEC looms large in the upcoming presidential election. Pro-crypto voices in the industry have called for the appointment of a chair with a more forward-looking stance on digital asset regulation. Armstrong’s strong criticism highlights the urgent need for greater regulatory clarity and consistency to enable innovation in the American crypto sector.
