Brian Armstrong Stands by Coinbase’s Compliance Strategy
In a recent social media post, Brian Armstrong, CEO of crypto exchange Coinbase, expressed his belief that the company’s decision to comply with United States money transmitter licensing laws was the right move. This comes in the wake of rival exchange Binance pleading guilty to criminal charges.
Embracing Compliance for Long-Term Success
Armstrong emphasized the importance of embracing compliance for the long-term success of the company, stating, “Since the founding of Coinbase back in 2012 we have taken a long-term view. I knew we needed to embrace compliance to become a generational company that stood the test of time.” He highlighted the steps taken by the company to obtain the necessary licenses, hire compliance and legal teams, and establish a brand built on trust.
“I knew we needed to embrace compliance to become a generational company that stood the test of time,” Armstrong stated, adding that his team “got the licenses, hired the compliance and legal teams, and made it clear our brand was […] following the rules.”
Despite acknowledging that the compliance strategy slowed the company’s growth and put them at a competitive disadvantage, Armstrong maintained that it was the correct approach. He stated, “we believe in the rule of law,” underscoring the company’s commitment to operating within the bounds of the law.
Regulatory Clarity and Offshore Exchanges
Armstrong also addressed the lack of regulatory clarity in the U.S. and its impact on the industry. He expressed concern that the absence of clear regulations is driving users to offshore exchanges like Binance, stating, “Americans should not have to go to offshore unregulated exchanges to benefit from this technology.” However, he remained optimistic that the resolution of the U.S. criminal case against Binance could pave the way for more regulatory clarity.
Armstrong has previously claimed that unclear regulations in the U.S. have driven a significant portion of crypto transactions offshore. While the Securities and Exchange Commission has filed suit against Coinbase for alleged violations of U.S. securities laws, these claims are unrelated to the Bank Secrecy Act or money transmitter licensing issues.
On Nov. 21, the Department of Justice announced that Binance has agreed to plead guilty to violations of the U.S. Bank Secrecy Act and to serving U.S. customers without obtaining the proper money transmitter licenses.
Armstrong’s stance on compliance and regulatory clarity reflects Coinbase’s commitment to operating within the bounds of the law, despite the challenges it may pose in a rapidly evolving industry.
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