Brian Armstrong Bashes The SEC for Not Explaining How Crypto Lending Falls Under Securities

Earlier today, Coinbase CEO Brian Armstrong expressed his disappointment on how the SEC handled the trading platform’s request to launch a crypto lending feature. The CEO is surprised how the financial watchdog claims the element is a security feature without any explanation. 

Furthermore, Mr. Armstrong feels the SEC is blocking Coinbase from lending while other platforms have practiced it for years.

Is the SEC Biased or Confused?

CEO Armstrong tweeted out his opinions, suggesting that the SEC is somewhat confused. He explained how the financial authority blatantly said that crypto lending is security. Afterward, he noted that Coinbase’s request for an explanation sadly fell on deaf ears.

After that came the funny behavior. After Coinbase questioned the Securities and Exchanges Commission, the watchdog slapped the platform with subpoenas. Coinbase complied with the SEC’s alleged investigations. Finally, the authority warned Coinbase against launching the lending feature. The SEC promised to sue the company if it proceeded with the launch.

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Brian Armstrong said that Coinbase is very committed to following regulations. However, he suggested that if there are rules, they should apply evenly in the financial sector. The CEO quoted the SEC’s Gary Gensler, who stated how important it is for the SEC to clarify regulatory issues and offer impartial guidance.

In comparison to what Gensler stated, it seems the SEC is running in dilemmas. Whether it is aware of the situation or not remains a query for the heavens to answer. Dallas Mavs owner and crypto enthusiast Mark Cuban also gave his thoughts on Mr. Armstrong’s plea. He sent a reply to the CEO saying, 

“Brian, this is “Regulation via Litigation.” They aren’t capable of working through this themselves and are afraid of making mistakes in doing so. They leave it to the lawyers. Just the people you don’t want impacting the new technologies. You have to go on the offensive.”

The CFTC’s Regulatory Battle

The Commodity Futures Trading Commission reportedly called out the SEC’s bias on regulating crypto about two years back. Fast forward to August this year; the CFTC sent out a tweet stating that digital currencies fall under their jurisdiction. Moreover, the CFTC backs its claims using a court ruling in 2018 that placed cryptocurrencies under the commodities category.

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The two regulatory bodies seem to be in a tussle for regulatory authority on digital currencies. However, CFTC claims that the SEC is treading on grounds beyond what they should watch over. Social media crypto enthusiasts are somewhat on CFTC’s side, despite some saying Biden’s administration gave the SEC the upper hand by taking too much time to appoint a new CFTC chairperson.