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Subscribe to our myFT Daily Digest email to stay informed about the latest news in cryptocurrencies every morning. Welcome to a special edition of the FT’s Cryptofinance newsletter. This week, we feature an exclusive interview with Brian Armstrong, the CEO of Coinbase.
It’s incredible to see how much has changed in just a year. Last summer, asset managers and crypto enthusiasts were actively involved in the crypto market. However, the landscape has shifted dramatically. FTX’s bankruptcy in November led to a significant crackdown on digital assets by US regulators, including the Securities and Exchange Commission (SEC). Coinbase, led by Brian Armstrong, has taken the lead in the battle against the SEC, which has been relentless in its pursuit of compliance within the crypto market.
To mark the one-year anniversary of our newsletter, I spoke with Armstrong about the future of Coinbase and its role in updating the financial system. In our interview, Armstrong revealed that the SEC asked Coinbase to delist all tokens except bitcoin before filing the lawsuit. This not only would have had a detrimental effect on Coinbase but also on the entire US crypto industry, highlighting the extent of the SEC’s authority.
Despite facing regulatory challenges, Armstrong remains committed to Coinbase’s US operations. The company is currently facing regulatory scrutiny from 10 state regulators, with some issuing cease and desist orders against Coinbase’s staking service. However, Armstrong intends to fight on all 10 fronts and eventually expand staking services to all 50 states. He expressed disappointment with states like California, known for their technological leadership, for taking a restrictive stance on staking.
Staking is a significant revenue stream for Coinbase and a vital part of the company’s effort to diversify income sources. Losing the staking business would be a significant blow. Although some digital asset companies are considering moving to more favorable regulatory environments, Armstrong stated that relocating Coinbase is not currently a possibility.
Coinbase’s revenue primarily comes from its US operations, making it crucial for the company to maintain a presence in the country. Even if Coinbase were to lose its case against the SEC, Armstrong is determined to continue operating in the US. The licenses acquired in other countries are part of Coinbase’s international expansion plans rather than contingency measures.
It’s clear that Armstrong and Coinbase have no intention of backing down. While the SEC’s lawsuit references only 13 tokens out of the 240 listed on the platform, Armstrong assures that it’s business as usual for the company. Delisting these 13 tokens would not have a substantial impact on revenue.
Overall, Armstrong’s view of Coinbase’s future is optimistic, despite the regulatory challenges. It’s evident that Coinbase is committed to staying in the US and continuing to adapt to the evolving landscape of the crypto industry.
As we conclude this special edition, let’s shift our focus to some non-Coinbase highlights of the week. Trading volume between the Russian rouble and Tether’s USDT stablecoin spiked significantly, indicating Russians’ search for alternative currencies amid the country’s weakening economy. Additionally, the US Office of Foreign Assets Control placed several individuals and entities under sanctions, with a significant portion of funds linked to Isis-Khorasan and al-Qaeda held in Tether’s USDT. Lastly, Binance announced the launch of Binance Japan, aimed at the Japanese market.
For more updates and insights on the world of cryptocurrencies, feel free to reach out to me at [email protected]. Weekly highlights of Cryptofinance are edited by Tommy Stubbington. Share your thoughts and feedback with us at [email protected].
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