Coinbase CEO Brian Armstrong has urged the future chair of the United States Securities and Exchange Commission (SEC) to drop the agency’s “frivolous” lawsuits targeting crypto companies and apologize to Americans.
In a recent post on X, Armstrong noted that the apology would not reverse the harm and damage done to the country but would begin to rebuild confidence in the SEC as a trusted institution.
The CEO pointed out the agency’s approach to regulating the crypto industry, which he claimed has triggered avoidable lawsuits against companies like Coinbase.
SEC Unable to Classify Crypto Assets
Under Gary Gensler’s leadership, the SEC has released contradictory statements on key matters, such as classifying digital assets as securities and the agency’s jurisdiction over crypto trading platforms.
Armstrong noted that in 2018, the SEC declared that crypto assets were not securities, only to reverse that stance in 2021 by categorizing the asset class as investment contracts. By 2024, the agency had altered its position again, asserting that digital assets are not securities.
The securities watchdog has also changed its classification stance on bitcoin (BTC). The regulator initially classified the asset as a security in 2023, only to re-establish its non-security status in 2024.
Armstrong further expressed concerns about the SEC’s authority over crypto exchanges. In 2021, the regulator claimed that no regulatory authority governed these platforms. A year later, it claimed that it had Congressional jurisdiction to regulate crypto exchanges.
SEC Goes After Big Firms
In recent times, the SEC has filed charges against prominent companies like Coinbase, Kraken, and Binance, and over $7.42 billion in fines have been imposed on crypto firms and individuals.
This year’s record far exceeds the totals from the previous two years, which were $308.9 million in 2022 and $150.26 million in 2023, which reflects a 63% increase compared to last year’s.
“The Most Lawless Chair”
The SEC approach to crypto matters has also led Gensler to face scrutiny over his leadership, with Minnesota Representative Tom Emmer criticizing him as the most destructive and lawless chair in the agency’s history.
Many in the crypto space have advocated for Gensler’s removal, a move Republican presidential candidate Donald Trump has pledged to pursue if elected.
