In a recent social media post, Coinbase CEO Brian Armstrong expressed confidence in his company’s decision to comply with United States money transmitter licensing laws. The statement comes in the wake of the news that rival exchange Binance is pleading guilty to criminal charges. Despite acknowledging the competitive disadvantage compliance brought, Armstrong emphasized the importance of embracing regulatory requirements for long-term success.
Armstrong highlighted the necessity of obtaining money transmitter licenses, noting that it was crucial for Coinbase to become a lasting, generational company. He explained that the company took steps to secure the licenses, hire compliance and legal teams, and reinforce its commitment to following regulatory rules.
While acknowledging that the compliance strategy slowed Coinbase’s growth, Armstrong defended the approach, stating, “we believe in the rule of law.” He admitted that adhering to regulations made it challenging to match the pace of competitors who opted for less compliant approaches, but he emphasized the importance of ethical business practices.
Brian Armstrong Opinion on Regulatory Clarity in the U.S.
Brian Armstrong criticized the lack of regulatory clarity in the United States, expressing concern that it is driving users towards offshore exchanges like Binance. He argued that Americans should not be forced to turn to unregulated platforms to benefit from cryptocurrency technology. However, he also sees the resolution of Binance’s U.S. criminal case as a potential catalyst for increased regulatory clarity.
Brian Armstrong claimed that unclear U.S. regulations have led to a significant portion, “95%,” of crypto transactions being conducted offshore. It’s worth noting that the Securities and Exchange Commission has filed a lawsuit against Coinbase, but the allegations do not pertain to violations of the Bank Secrecy Act or money transmitter licensing issues.
On November 21, the Department of Justice announced that Binance has agreed to plead guilty to violating the U.S. Bank Secrecy Act and serving U.S. customers without obtaining the necessary money transmitter licenses. This development underscores the ongoing challenges and legal scrutiny faced by major players in the crypto exchange space.
