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Brian Armstrong, CEO of Coinbase, called Binance co-founder Changpeng Zhao’s resignation an opportunity to start a new chapter for the crypto industry.
Armstrong highlighted Coinbase’s efforts to be compliant and create trust after Binance was issued a $4.3 billion fine following CZ’s resignation.
Coinbase CEO Armstrong Touts Compliance
A few years ago, Changpeng Zhao stepping down as Binance CEO would be unthinkable. His resignation as CEO marks a critical moment for the crypto space, plunging the industry into uncertainty. However, Coinbase CEO Brian Armstrong has been quick to grab the opportunity to highlight Coinbase’s compliance efforts, calling the resignation an opportunity to write a new chapter for the crypto industry. Armstrong stated that he was delighted that Coinbase made the correct decisions regarding regulatory compliance, complying with US money transmitter licensing requirements, even though it put the exchange at a competitive disadvantage. Armstrong posted on X,
“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. “We got the licenses, hired the compliance and legal teams, and made it clear our brand was about trust with our customers and following the rules. We wanted to increase transparency and raise the bar on trust, so we became a public company in 2021. This meant we couldn’t always move as quickly as others.”
Armstrong also highlighted that taking a compliant approach was a tougher and considerably more expensive path.
“It’s more difficult and expensive to take a compliant approach. You can’t launch every product that customers want when it’s illegal,” he said in his post. “Today’s news reinforces that doing it the hard way was the right decision. We now have an opportunity to start a new chapter for this industry.”
Coinbase Not Free From Regulatory Pressures
Coinbase has not been free of regulatory scrutiny and has repeatedly clashed with the United States Securities and Exchange Commission. The Securities and Exchange Commission has filed a lawsuit against Coinbase, alleging it has been operating as an unregistered broker and exchange, violating federal securities laws. Coinbase, which generates most of its revenue from the US markets, has been actively exploring alternative markets as the challenges of dealing with US regulators and regulations continue growing.
Paul Grewal, the Chief Legal Officer at Coinbase, was quick to point out the handling of the crypto industry by the US government and expressed concerns about the current regulatory approach, stating,
“The US regulation by enforcement-only approach has only increased consumer risk and driven customers and innovation out of the country. Legislation is essential for safeguarding consumers and fostering a responsible marketplace in America.”
Crypto Community Far From Impressed
Armstrong’s comments about Coinbase’s compliance and their timing did not sit well with the crypto community, who were quick to call him out on his hypocrisy. One user on X called out Armstrong, adding that Coinbase is not profitable and only functioning because of BlackRock.
“Blackrock is saving you. Your exchange is not profitable (can’t work in tradfi). And too many high-level people have already a feet in crypto. Not super well played, Brian. We’ll stick with Dex and cultivate real decentralized projects.”
Others pointed out that despite Coinbase going out of its way to remain compliant and in the regulator’s good books, the exchange still got sued.
“So it was actually a US v Others all along? Shame on you, Brian.”
The Binance Situation
Binance co-founder Changpeng Zhao stepped down as CEO of the exchange following a plea deal with the Justice Department, according to court filings. Zhao admitted to anti-money laundering violations, agreeing to pay a $50 million fine. Binance also pleaded guilty to counts of money laundering, conspiracy to conduct an unlicensed money-transmitting business, and sanctions violations. As a result, Binance has agreed to pay a fine of $1.8 billion and consent to a forfeiture order that requires it to pay an additional $2.5 billion.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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