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Coinbase’s Brian Armstrong Takes Stab at Binance & CZ, Labels Products “Illegal”

Last Updated November 22, 2023 2:35 PM
Josh Adams
Last Updated November 22, 2023 2:35 PM
Key Takeaways
  • Binance and its (now former) CEO have admitted wrongdoing to the U.S. Department of Justice.
  • Changpeng “CZ” Zhao faces time in prison for his behavior at Binance.
  • The Coinbase CEO chimed in shortly after the news broke.

Brian Armstrong, the CEO of Coinbase, the second-largest crypto exchange in the world, has waded into the Binance saga after U.S. authorities levied one of the largest fines in U.S. corporate history yesterday, November 21, 2023.

The Law Catches up With Binance

His comments emphasized Coinbase’s compliant approach as Binance and its (now former) CEO admitted wrongdoing following a U.S. Department of Justice (DOJ) investigation that stretched back to 2020. Binance is currently the largest crypto exchange in the world.

Regulators levied over $4 billion in fines against Binance. They accused the firm of enabling illegal transactions that violated sanctions and anti-money laundering laws. Binance will now be required to report suspicious activity to authorities.

Following a deal with the DOJ , Binance founder and CEO Changpeng Zhao resigned his position at the head of the world’s largest cryptocurrency exchange. He stated, “I made mistakes, and I must take responsibility.”

Brian Armstrong Twists The Knife

In an X post  following the DOJ announcement , Armstrong touted Coinbase’s embrace of regulation and contrasted his publicly-traded exchange with Binance’s illegality. “We believe in the rule of law,” he said.

Armstrong also reinforced his company’s long-held position that taking a compliant approach to cryptocurrency regulation, despite added difficulty and expense, is the right path and will pay dividends over the long term.

“We took a lot of arrows operating here in the U.S. due to the lack of regulatory clarity, and my hope is that today’s news serves as a catalyst to finally achieve that,” Armstrong wrote in a tweet. “Americans should not have to go to offshore unregulated exchanges to benefit from this technology.”

The CEO also expressed optimism that Binance’s admissions of wrongdoing could mark an inflection point for the cryptocurrency industry. “This industry should be built right here in America, in a compliant way, under U.S. law,” he wrote, adding his belief that the U.S. system will eventually “get this right.”

Armstrong hopes that its brand reputation for transparency and trust will allow it to capitalize on a newly compliant crypto sector. “We’re going to stay here in the U.S. because we believe in economic freedom and that the U.S. democratic system will eventually get this right,” Armstrong concluded.

Coinbase Is Publicly Traded

Unlike chief rival Binance, Coinbase operates as a publicly traded company. The leading U.S. cryptocurrency exchange went public  on April 14, 2021, making it one of the only major players in the crypto industry to do so. In his X post, Armstrong called it “the right decision.”

“Going public” in the U.S. means navigating a complex regulatory landscape. As a public company, Coinbase must adhere to stricter regulatory standards and compliance practices, including audits, financial disclosures, and oversight. Its CEO Brian Armstrong has touted this transparency and trustworthiness as a competitive advantage that he believes will enable Coinbase to capitalize on the sector’s growth in the long term.

Coinbase and others must also file regular financial reports with the SEC, and the Sarbanes-Oxley Act  imposes rigorous standards on internal controls and corporate governance. Publicly traded companies must also maintain compliance with listing requirements, prevent insider trading, and hold annual shareholder meetings.

Whilst going public does not preclude wrongdoing, it does offer a degree of protection and transparency for investors. A fact that Coinbase enjoys reminding its audience, especially now.

However, its publicly traded status has not stopped it from facing similar regulatory action from the U.S. Securities and Exchange Commission (SEC). Back in June, the agency charged both Binance  and Coinbase  with breaking numerous securities laws. In those cases, both firms deny wrongdoing.

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