Coinbase CEO Brian Armstrong disclosed the details of its legal battle with the SEC, adding that the exchange might consider leaving the U.S. due to the lack of regulatory clarity around the crypto industry
Being present at a London fintech conference, the CEO of US cryptocurrency exchange Coinbase, Brian Armstrong told CNBC the company is getting ready for a lengthy legal battle with the Securities and Exchange Commission (SEC). Moreover, the exchange is even considering relocating from the U.S., as the lack of regulatory clarity creates legal obstacles to the company’s activities.
As we have previously reported, Coinbase has become the second crypto firm to receive SEC Wells Notice after the stablecoin issuer Paxos got targeted over the minting of Binance USD (BUSD).
While the latter platform closed its stablecoin product under the Binance brand in response to the SEC notification, Coinbase repeatedly claimed it operated in strict compliance with the norms of current legislation in the field of securities handling. Besides, the company says that neither the products of the crypto exchange for placing bets nor the USDC stablecoin are securities.
Despite receiving the Wells Notice, which is a final warning before actual legal action, Armstrong expressed disappointment with the regulator’s lack of clarity, revealing that the company had not received any clear details from the SEC about the alleged violations.
He also explained that the company considers going to court to gain the clarity it requires, although it’s not the preferred outcome.
Not only does the SEC’s “abdication of responsibility” and failure to publish a clear rulebook for the market affect Coinbase itself, but also impacts the wider crypto market. Therefore, Armstrong revealed that Coinbase is exploring the possibility of relocating from the U.S. due to the lack of legal clarity.
Currently, the UK is considered a prior destination due to recent its efforts to position itself as a crypto hub. For instance, starting Jan. 1 2023, foreign investors purchasing crypto through local UK investment managers or brokers are exempt from the additional tax.