Key Takeaways
- Congress members were set to vote on a new financial innovation bill.
- Coinbase CEO implores U.S. citizens to get their respective congress representatives to vote ‘yes’.
- Coinbase has long been calling for regulatory clarity in the U.S.
Coinbase continued its efforts to gain regulatory clarity from the U.S. government, with CEO Brian Armstrong imploring citizens to push their respective congress representatives to vote yes to the FIT21 bill.
The U.S. House of Representatives’ Financial Services Committee and the House Agriculture Committee were due to vote on the Financial Innovation and Technology for the 21st Century Act (FIT21) bill over July 26 and 27. The bill is expected to bring regulatory clarity to the cryptocurrency industry, according to Armstrong.
The Coinbase CEO noted that the bill will continue to evolve over the coming months, but implored citizens to contact their Congress representative to garner more votes in favor of the legislation.
Armstrong went as far as labeling a positive vote for FIT21 act as a “vote to protect your crypto, American innovation, and national security”. A link that prompted users to contact their respective Congress member outlined that the bill would hold promising outcomes for consumers and promote job opportunities.
A key takeaway of the bill, which was approved by the House Financial Services Committee on July 26, is its provision of rules which will guide cryptocurrency firms on whether to register with the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC).
Reform Regulations or Face an Exodus
Armstrong, along with Coinbase, has long been calling for U.S. regulators to provide clear regulatory parameters for the cryptocurrency ecosystem to operate in. The exchange has had its own legal issues to grapple with in 2023, with the SEC instituting charges against Coinbase for alleged securities violations.
Coinbase and Binance.US were hit with separate lawsuits from the SEC in June over alleged unregistered securities offerings. Both companies are now embroiled in legal disputes with the agency.
Armstrong previously called for regulatory reform towards the sector in both the United Kingdom and the U.S., or risk cryptocurrency exchanges and service providers moving to “offshore havens” to continue their operations.
Taking the Fight to the SEC
Coinbase has also looked to use the U.S. legal system to strong-arm the SEC into issuing regulatory guidelines for exchanges and platforms offering cryptocurrency trading and products.
In April, the exchange filed a petition for a writ of mandamus to the SEC in the U.S. Court of appeals to create new rules for cryptocurrencies and provide clarity to the wider industry. A mandamus is a court order compelling a government organization or official to carry out duties or remedy discretionary abuses.
The details of the petition sought the SEC to provide clear explanations on the circumstances that would deem a cryptocurrency as a securities offering as well as the creation of a new market structure framework that would be compatible with the asset class.
The SEC has twice turned down Coinbase’s petition, most recently in June 2023, repeatedly claiming that the exchange’s arguments are baseless.
An excerpt from their latest response to a court order for a reply to the mandamus noted that Coinbase “erroneously” contended that the SEC’s enforcement of existing legal requirements for securities constituted a “sub silentio decision” to deny the exchange’s petition.
Coinbase chief legal officer Paul Grewal took to Twitter to contend the SEC’s latest response, claiming the agency continues to “repeat the fallacy that they haven’t made any decision on new crypto rules”:
Courting Lawmakers While Exploring Options
Armstrong reportedly met with U.S. lawmakers in July 2023 to discuss various elements of cryptocurrency legislation. Earlier in the year, the Coinbase CEO visited the Dirksen Senate Office in Washington to discuss similar matters with senators.
Meanwhile, Coinbase has also been considering its future away from American shores. Armstrong and Coinbase executives visited the United Arab Emirates in May 2023, exploring the potential for the UAE to be a strategic hub for the company amid ongoing regulatory uncertainty in the U.S.
