Home Crypto Coinbase CEO Brian Armstrong leads crypto DC push for new rules, warning jobs will go overseas

Coinbase CEO Brian Armstrong leads crypto DC push for new rules, warning jobs will go overseas

by Janine Lindsey

The crypto industry is ramping up its efforts to urge US lawmakers to pass new regulations to govern digital currencies. Led by Coinbase and over 50 founders of crypto companies, the movement, known as “Stand with Crypto,” seeks to emphasize the importance of industry-friendly regulation in order to prevent job losses overseas.

Coinbase CEO Brian Armstrong expressed his concerns about the lack of clear rules on how crypto should be regulated and how consumer protection should be ensured. He highlighted the need for the US to implement regulations similar to those in other G-20 countries. Currently, legislation is being considered by the House Financial Services Committee, focusing on bridging the regulatory gaps between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).

The proposed legislation aims to provide clarity on the classification of crypto tokens as commodities or securities, as well as outlining the registration requirements for firms with the SEC. It also calls for the SEC to develop customized rules for governing crypto. Although the legislation is expected to pass through the House, its progress in the Senate remains uncertain due to objections from Democrats.

Analysts predict that the crypto legislation is unlikely to make significant progress in the Senate by the end of 2024. Democrats are hesitant to grant extensive authority to the CFTC, as it lacks experience in protecting retail investors. On the other hand, the crypto industry seeks to reduce the power of the SEC in favor of the CFTC.

Regardless of the legislative outcome, Armstrong believes that there are reasonable options for new rules to land, as lawmakers are aware of the risks associated with inaction. He expressed his support for both the House bill and comprehensive legislation proposed by Sens. Cynthia Lummis and Kirsten Gillibrand. Armstrong emphasized the need for clear rules to prevent the SEC’s practice of regulation through enforcement or harassment, which he considers unsustainable for crypto startups.

Armstrong highlighted the potential consequences of Congress failing to pass legislation, suggesting that the legal system may ultimately decide the fate of the industry. He noted that the SEC has not been successful in recent court rulings, indicating a repudiation of its regulatory approach. Armstrong warned that an escalation of the issue to the Supreme Court would not align with lawmakers’ intentions.

In addition to Coinbase, leaders of smaller crypto firms joined the push on Capitol Hill to demonstrate the industry’s potential to stimulate economic growth. They emphasized that blockchain technology is widely used across various sectors such as supply chain, finance, retail, communications, and security.

Meanwhile, SEC Chair Gary Gensler testified before the House Financial Services Committee, reiterating his view that the crypto industry is plagued by fraud, manipulation, and scams. Gensler emphasized the SEC’s efforts to protect the American public from noncompliance and schemes in the field. However, Coinbase and other crypto industry stakeholders argue that the SEC’s approach to regulating crypto has become hostile and call for equal treatment under the law.

As the crypto industry continues to push for regulations, the outcome remains uncertain. The industry’s lobbying efforts aim to promote a regulatory framework that fosters innovation, protects consumers, and prevents job losses. Whether these efforts result in meaningful legislation remains to be seen, but the discussions and debates surrounding crypto regulation are likely to continue in the coming months.

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