It 'would certainly help' if Gary Gensler were no longer SEC chair: Coinbase CEO

·Executive Editor

Updated 8 September 2023 at 9:49 am·3-min read

Coinbase CEO Brian Armstrong said one way his company’s dispute with the Securities and Exchange Commission could get resolved is if someone else replaces Gary Gensler as chair of the agency.

"Maybe" that will happen in 2024, he said in an interview Thursday with Yahoo Finance Live (video above) at the Goldman Sachs Communacopia and Tech Conference. Someone else doesn’t need to be in that seat for Coinbase to thrive, he added, but "that would certainly help."

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler, testifies before the Senate Banking, Housing and Urban Affairs Committee during an oversight hearing on Capitol Hill in Washington, U.S., September 15, 2022. REUTERS/Evelyn Hockstein — Securities and Exchange Commission chairman Gary Gensler REUTERS/Evelyn Hockstein

The SEC sued Coinbase (COIN) in June as part of a crackdown on the crypto world. It alleged the company had been operating an unregistered exchange because Coinbase allowed the sale of certain crypto tokens the agency considers to be securities — and therefore part of the SEC's jurisdiction.

The question of what constitutes a security is key in this case as well as the agency's larger campaign to rein in a variety of players in the crypto world. The regulator has charged 20 different crypto actors with violating securities laws since the beginning of 2023.

Armstrong has been outspoken about his opposition to the lawsuit as well as the SEC's approach and stuck to that stance Thursday.

"I do think the leadership there has taken a very hostile view towards crypto ... regulation by enforcement posture instead of just engaging in rulemaking as they're required to by law."

Armstrong added that Coinbase has "really good relationships" with the "staff" that is at the SEC and "many of the commissioners."

He said he does expect there eventually to be clarity on how the crypto industry operates in the US, whether it is from the courts or from legislation written by Congress.

"Or maybe next year we'll have a different SEC chair," he said. "Somehow this is gonna get resolved in the US."

Brian Armstrong, CEO of Coinbase, speaks during the Piper Sandler Global Exchange and FinTech Conference in New York City, U.S., June 7, 2023. REUTERS/Brendan McDermid — Brian Armstrong, CEO of Coinbase. REUTERS/Brendan McDermid

In a blog post Thursday, Coinbase said it was entering a new phase of international expansion, with a focus on acquiring licenses and registering and establishing operations in markets "that are enacting clear rules." Some priority markets include Europe, Canada, Brazil, and Australia. It officially launched in Canada in August.

Coinbase has made it clear it has no plans of leaving the US. Armstrong told Yahoo Finance Thursday that "Coinbase is going to be a US company with a multinational reach."

He also expects crypto to become an issue in the 2024 presidential campaign, and said the candidates running thus far "see it as an opportunity to challenge" policies of the current White House "that they view as not in line with what the American people want."

One GOP candidate, Vivek Ramaswamy, made some forceful comments on social media after a key court decision went against the SEC. The District of Columbia Court of Appeals in Washington said last month that the SEC had been "arbitrary and capricious" when it denied an application from an asset manager to convert its bitcoin trust into a spot bitcoin exchange-traded fund.

A spot bitcoin ETF would allow investors to get exposure to the world’s largest cryptocurrency without having to own it, possibly expanding mainstream acceptance of digital assets.

"The shadow government in D.C. is out of control & the federal courts are our only remaining line of defense against the unlawful rogue behaviors of 3-letter government agencies," Ramaswamy said on X, formerly known as Twitter. "This decision is strong and clears a path to keep Bitcoin & blockchain innovation in the U.S."

The shadow government in D.C. is out of control & the federal courts are our *only* remaining line of defense against the unlawful rogue behaviors of 3-letter government agencies. This decision is strong and clears a path to keep Bitcoin & blockchain innovation in the U.S.… https://t.co/FsykKyQEVG
— Vivek Ramaswamy (@VivekGRamaswamy) August 30, 2023

Armstrong said Thursday that "I think this could become a hot topic in the presidential race in 2024."

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