Coinbase CEO calls for the next SEC chief to apologize for their cryptocurrency regulations

Coinbase CEO Brian Armstrong has urged the next Chair of the US Securities and Exchange Commission (SEC) to drop the agency’s “frivolous” cases against crypto firms and issue a public apology to the American people.

In a post on X on Oct. 29, Armstrong pointed out inconsistencies in the SEC’s treatment of the crypto industry, leading to unnecessary lawsuits against companies like Coinbase. He suggested that while an apology may not undo the harm, it could be a step towards rebuilding trust in the SEC.

He expressed, “It would not reverse the damage done to the country, but it would initiate the process of restoring trust in the SEC as an institution.”

Conflicting SEC Position

During Gary Gensler’s leadership, the SEC has provided conflicting statements on crucial matters, such as the classification of digital assets as securities and its regulatory jurisdiction over digital asset exchanges.

Armstrong highlighted that in 2018, the SEC declared digital assets were not securities, only to change its stance in 2021 by deeming them investment contracts. By 2024, the agency reverted to its initial position, stating that digital assets are not securities.

There have also been shifts in the SEC’s view on Bitcoin’s classification. Initially considered a non-security in 2023, the SEC expressed uncertainty before reaffirming its non-security status in 2024.

Armstrong also raised concerns about the SEC’s authority over crypto exchanges. In 2021, the SEC asserted no regulatory jurisdiction over these exchanges, but a year later claimed Congressional authority to supervise digital asset exchanges.

The SEC’s stance on clarity in securities law has also been inconsistent. While it previously admitted uncertainty regarding digital assets as securities, in 2023, it insisted that its regulatory framework, developed over the past 90 years, was clear.

These conflicting positions have created confusion in the industry and intensified calls for regulatory transparency. Various members of the crypto community have advocated for the removal of SEC Chair Gensler, a move Donald Trump, a Republican presidential candidate, has pledged to pursue if elected.

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