The crypto space in the United States remains largely unregulated at the moment.
Brain Armstrong, the CEO of leading cryptocurrency exchange Coinbase, believes that several regulators will be required to regulate the cryptocurrency space. He mentioned this during a recent podcast interview.
He stated that cryptocurrencies would likely not be regulated by the US Securities and Exchange Commission (SEC) alone. Armstrong said;
“Here’s what I’m realizing. Crypto is going to be many different things. It’s not just going to be one regulator doing it. Think about cryptocurrencies like Bitcoin. That’s pretty clearly a commodity. Or Ethereum. Many of these are commodities that probably should be regulated by the commodities [regulator], or the CFTC.”
He added that if people want to raise money for their company as security tokens, that should be regulated as a security by the SEC. However, Armstrong noted that the SEC needs to provide clarity regarding what it considers securities within the cryptocurrency space.
In addition to regular cryptocurrencies, we have stablecoins that are pegged to fiat currencies. Armstrong believes a different agency should be in charge of regulating stablecoins. He said;
“Separately, there are also some cryptocurrencies that are going to be currencies like stablecoins, and maybe the Treasury should regulate those. Finally, there are going to be cryptocurrencies that are none of the above. They’re artwork or something that probably shouldn’t even be regulated.”
The Coinbase CEO argued that regulators need to find the right balance between protecting investors and promoting innovations within the crypto ecosystem. He said;
“We want to balance protecting people, but we also want to not have the government be in a position where it’s picking winners and losers. Just because something is legal doesn’t make it a good investment.”
Armstrong reiterated Coinbase’s desire to work with regulatory agencies to eliminate fraud and scams in the cryptocurrency space. However, he doesn’t want the government to make it tough for ordinary investors to enter the market. He said;
“I want to work with anybody in government to make that stuff not happen. The danger is if we ever get into a place where we say only wealthy people can now invest because somehow there’s an accredited investor test. That’s inherently exclusionary. I don’t like the accredited investor laws.”
Coinbase is a publicly-listed company in the United States and one of the largest cryptocurrency exchanges by market cap.