Warren’s comments come amid FTX’s downfall, Armstrong is saying that many crypto companies are based offshore and it ‘makes no sense’ to punish U.S. companies.
• The Coinbase chief has hit back at calls for tighter regulation on U.S. crypto firms in the wake of FTX’s liquidity crisis, saying it “makes no sense” given that many so many crypto companies are based offshore.
• His comments came after Senator Elizabeth Warren, who has been highly critical of the crypto sector, tweeted on Wednesday that the FTX crisis showed how much of the industry “appears to be smoke and mirrors.” She added that “more aggressive enforcement” was needed, and she would continue pushing the Securities and Exchange Commission (SEC) “to enforce the law to protect consumers and financial stability.”
Blog Introduction: Coinbase CEO Brian Armstrong has responded to criticism from Senator Elizabeth Warren following the FTX liquidity crisis. In a series of tweets, Armstrong said that many crypto companies are based offshore and it ‘makes no sense’ to punish U.S. companies. He added that the SEC has ‘failed to create regulatory clarity around crypto assets’ and that what is needed is ‘sensible regulation – not knee-jerk reactions from people who don’t understand this technology.’
In her tweet, Senator Warren said that the FTX crisis showed how much of the crypto industry “appears to be smoke and mirrors” and called for more aggressive enforcement. She added that she would continue pushing the Securities and Exchange Commission (SEC) “to enforce the law to protect consumers and financial stability.”
But in a series of tweets, Coinbase co-founder Brian Armstrong said the SEC was itself the problem, in that it had “failed to create regulatory clarity here in the U.S. around crypto assets. We need sensible regulation – not knee-jerk reactions from people who don’t understand this technology.”
He added that many crypto companies are based offshore and it ‘makes no sense’ to punish U.S. companies. He concluded by saying that he hoped Senator Warren would engage in a constructive dialogue with the crypto industry instead of “issuing headlines.”
“It’s ironic that Senator Warren is now calling for more aggressive SEC action, when it was the lack of regulatory clarity from the SEC that caused this situation in the first place,” he wrote on Twitter.Armstrong
Armstrong pointed out that many crypto companies are based offshore, and that it would be “very difficult” for the SEC to crack down on them.
He added that if the U.S. government did take punitive action against U.S.-based firms, it would simply lead to more businesses moving offshore.
“So any calls for aggressive SEC action here in the U.S. in response to this FTX incident makes no sense, and would only punish U.S. companies,” Armstrong concluded.Armstrong
It remains to be seen whether or not Senator Warren will take up Brian Armstrong’s invitation for a constructive dialogue with the crypto industry. However, what is clear is that there is a growing disconnect between those who believe that tighter regulation is needed and those who believe that such regulation would stifle innovation. As the FTX crisis continues to unfold, it will be interesting to see how this debate plays out.
Warren has been a vocal critic of the crypto industry and has previously called for stricter regulation on cryptocurrencies and initial coin offerings (ICOs). She has also accused major exchanges of being “ripe with fraud and abuse,” and has called for a ban on trading crypto assets.It remains to be seen whether the SEC will take action in response to the crisis, but it is clear that the issue is now on the regulator’s radar.
Armstrong’s comments are likely to add fuel to the fire for those who are calling for greater regulation of the crypto industry. It will be interesting to see how this debate develops in the coming weeks and months.