Coinbase chief executive Brian Armstrong says he’s in Washington, D.C. to talk to officials about crypto as the industry faces a wave of regulatory scrutiny.
In a tweet to his 1.1 million followers, Armstrong, who oversees the largest crypto exchange in the US, announces he’s in the nation’s capital, and gives an open invitation for discussions on crypto regulation.
“I’m in Washington D.C. and had a meeting canceled. Will be at the Dirksen Senate Office building snack bar for the next hour or so, if anyone wants to come chat about crypto and how we get crypto legislation + regulatory clarity this year.”
Hours later, another tweet from the CEO suggests he had a series of conversations with officials involved in crypto regulation.
“Thanks everyone who came by to chat! Great to meet the folks working behind the scenes to draft crypto legislation. Hopefully we can get something done this year.
Much needed for consumer protection, and to see this industry built in the U.S.”
Armstrong’s trip to Washington comes after Kraken, also US-based, was forced to shut down its staking services in the country and pay the U.S. Securities and Exchange Commission (SEC) a $30 million fine.
Coinbase’s chief legal officer Paul Grewal chimed in on the developments with Kraken, addressing some of the common questions regarding crypto staking. Grewal said that staking is a necessary and legitimate form of investment for digital asset holders, regardless of SEC scrutiny.
“Questions: Are the underlying crypto protocols genuinely creating value on your investment? Or are they just new tokens that dilute the value of the ones you already have?
Answers: Staking is a way to earn rewards by helping to secure a blockchain. Most networks that rely on staking – including all that we support– reward users using their own token, which can rise and fall in value like any other digital asset.
Rules and rulemaking could and would address all of this. That’s why, after all, Congress passed the Administrative Procedure Act in the first place. Regulation by enforcement is a poor substitute.”
SEC Chair Gary Gensler maintains that if crypto companies want to offer staking services, there are clear pathways for regulatory compliance. However, SEC Commissioner Hester Peirce has vocally disagreed with Gensler and the SEC, and wrote a public letter of dissent in regard to the enforcement actions.
Says Peirce,
“Most concerning, though, is that our solution to a registration violation is to shut down entirely a program that has served people well. The program will no longer be available in the United States, and Kraken is enjoined from ever offering a staking service in the United States, registered or not. A paternalistic and lazy regulator settles on a solution like the one in this settlement: do not initiate a public process to develop a workable registration process that provides valuable information to investors, just shut it down.”
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