Coinbase Expects Court Battle With SEC and More Investments Overseas

Coinbase expects to fight a court battle and boost its investments outside the United States.

These moves are coming because the U.S. has fallen behind other jurisdictions in developing regulatory clarity around cryptocurrency, Coinbase CEO Brian Armstrong told CNBC in an interview on Tuesday (April 18).

Certain U.S. regulators have instead pursued a “regulation by enforcement approach, which is not helping,” Armstrong said.

As a result, Coinbase is looking to boost its investments in markets outside the U.S. Armstrong said Hong Kong, Europe, the United Kingdom and Singapore are ahead of the U.S. in developing regulatory clarity around crypto.

The U.K., in particular, has shown leadership in this area and is working to become a Web3 hub, Armstrong said while at an event in the U.K.

“That’s really attractive for us, and so we have an office here, we have a presence, and I think we’re going to invest more,” he said.

Armstrong told other publications as well on Tuesday that Coinbase could eventually be one of the crypto firms driven to move offshore by unclear regulations.

Coinbase also expects to go to court to gain clarity from the Securities and Exchange Commission (SEC), Armstrong said.

“It’s really unfortunate. I think we’re going to have to actually end up going to court to get the clarity we need and create that case law,” Armstrong said.

Beyond that, Armstrong said he would like to see in the U.S. the passage of a clear stablecoin bill, comprehensive legislation around the centralized actors in crypto, like exchanges and custodians, and clarity about what is a commodity and what is a security.

This interview comes about a month after Armstrong announced that Coinbase has received a Wells notice from the SEC tied to the exchange’s listing of potential unregistered securities across its suite of digital asset products and services.

As PYMNTS reported on March 22, Wells notices are not formal charges or lawsuits but can often lead to them.

Another Wells notice recently delivered in the digital asset sector went to Paxos, a New York-regulated blockchain infrastructure and financial services platform, which responded by sunsetting its Binance-branded stablecoin product.