- Binance’s $4 billion settlement marks a turning point for crypto controversies.
- Armstrong emphasizes the need for regulatory clarity to attract institutional investments.
- Coinbase pushes SEC for crypto regulation, citing Kraken’s enforcement as precedent.
The cryptocurrency sector is now able to turn the page on a series of controversies and issues following a landmark settlement between Binance and the U.S. Department of Justice, as stated by Coinbase CEO Brian Armstrong on Monday in an interview with CNBC’s Joumanna Bercetche.
“The enforcement action against Binance, that’s allowing us to kind of turn the page on that and hopefully close that chapter of history.”
Brian Armstrong, COINBASE CEO
Armstrong said that many companies in the cryptocurrency sector are actively involved in shaping the crypto economy and altering the global financial system. However, most of these companies are still in the startup phase. He further added, “I think that regulatory clarity is going to help bring in more investment, especially from institutions,”
Last week, Binance faced a $4 billion settlement from the U.S. Department of Justice, leading to the resignation of its founder and CEO, Changpeng Zhao, who also pleaded guilty to charges related to money laundering violations. The U.S. government charged Binance with breaches of the U.S. Bank Secrecy Act and violating sanctions imposed on Iran.
Armstrong countered the notion that cryptocurrency is predominantly utilized for illicit activities like fraud, money laundering, and financing terrorism. This belief is often echoed by financial institutions hesitant to enter the crypto space due to compliance worries. He pointed out that while there has been a minor amount of illegal activity in the crypto world, it accounts for less than 1% of all transactions, based on available data. Armstrong highlighted to CNBC that, in comparison, the illicit use of cash is frequently higher than this percentage.
Armstrong recognized the presence of “bad actors” in the crypto industry, referencing Binance’s issues and the FTX collapse under Sam Bankman-Fried’s fraudulent activities. Attending the Global Investment Summit in the U.K., he sees Coinbase’s invitation as a nod to their company, but not a blanket endorsement of the crypto sector. He expressed admiration for U.K. Prime Minister Rishi Sunak’s stance on digital currencies, leading to Coinbase’s increased investment in the U.K. This aligns with the U.K.’s efforts to regulate digital assets like cryptocurrencies and stablecoins.
Recently, Coinbase reiterated its demand for the Securities and Exchange Commission (SEC) to address its petition for establishing cryptocurrency regulations. This call is reinforced by the SEC’s recent enforcement actions against Kraken. In a legal document submitted on November 22 to the U.S. Court of Appeals for the Third Circuit, Coinbase’s lawyers responded to a November 21 letter from the SEC, which indicated an intention to report on the status of the crypto rulemaking petition by December 15.
Coinbase initially filed this petition in July 2022, urging the SEC to “propose and adopt rules for the regulation of securities offered and traded through digital methods.” The exchange has indicated that there have been delays in receiving responses to its request.
