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SEC is on a 'lone drive,' dials regarding on request business may emigrate, Coinbase CEO stated

May 9, 2023: The cryptocurrency exchange Coinbase of CEO, Brian Armstrong, doubled down on his criticisms of the U.S. Securities and Exchange Commission chief Gary Gensler but added the business would not leave the U.S. despite the regulatory uncertainty the company is facing in the country.

Coinbase has been under intense regulatory scrutiny in the U.S. lately following a grim year for the crypto industry. Significant companies like FTX and Terra fail, prices plunge, and investors lose billions of dollars.

The SEC earlier this year served Coinbase with a Wells Notice, a letter that the regulator sends to a company or company after an SEC investigation that states the SEC is planning to bring an enforcement action against them.

At the heart of the regulator’s dispute with Coinbase and other crypto companies is the allegation that it is selling unregistered securities to investors.

“The SEC is a bit of an outlier here,” Armstrong said in an interview in Dubai on Monday. “There’s kind of a lone crusade, if you will, with Gary Gensler, the chair there, and he has taken a more anti-crypto view for some reason.”

“I don’t think he’s necessarily attempting to regulate the industry as much as curtail it. But he’s created some lawsuits, and it’s pretty unhelpful for the industry in the U.S. writ large. Still, it also is an opportunity for Coinbase to get that clarity from the courts that will benefit the crypto industry and the U.S. more broadly.

Armstrong also rowed back on his suggestion last month that the company may be compelled to move its headquarters overseas.

“Coinbase is not going to relocate overseas,” Armstrong said. “We’re always going to have a U.S. presence. But the U.S. is a little behind right now.”

“I would say we’re seeing more thoughtful approaches, for instance, in the EU [European Union], they’ve already passed comprehensive crypto legislation, the U.K. has been incredibly welcoming, and for us there, and that’s been a hub where we’ve decided to serve the U.K. market.”

At an April fintech conference in London, Armstrong said that Coinbase might consider relocating outside the U.S. if the current regulatory headwinds persist. He said the U.S. “has the potential to be an important market in crypto,” but right now is not delivering regulatory clarity.

If this goes on, he said, Coinbase would consider investing more abroad, including relocating from the U.S. to elsewhere.

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