Brian Armstrong, CEO of crypto exchange Coinbase, thinks that his company made the right decision to comply with U.S. money transmitter licensing laws.
In a Nov. 21 social media post, Armstrong weighed in on the news that rival exchange Binance is pleading guilty to criminal charges, stating that he is glad his own exchange decided to obtain money transmitter licenses, even though it put the company at a competitive disadvantage.
Since the founding of Coinbase back in 2012 we have taken a long-term view. I knew we needed to embrace compliance to become a generational company that stood the test of time. We got the licenses, hired the compliance and legal teams, and made it clear our brand was about trust…
— Brian Armstrong ️ (@brian_armstrong) November 21, 2023
“I knew we needed to embrace compliance to become a generational company that stood the test of time,” Armstrong stated, adding that his team “got the licenses, hired the compliance and legal teams, and made it clear our brand was […] Following the rules.”
Armstrong acknowledged that his team’s compliance strategy slowed the growth of the company, stating that “we couldn’t always move as quickly as others,” as it’s “more difficult and expensive to take a compliant approach.” However, Armstrong claimed his team’s approach was correct because “we believe in the rule of law.”
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Armstrong also took aim at what he sees as a lack of regulatory clarity in the U.S., which he claims is pushing users to offshore exchanges like Binance. “Americans should not have to go to offshore unregulated exchanges to benefit from this technology,” he stated. However, he also struck a positive tone, claiming that the resolution of the U.S. criminal case against Binance may finally be the “catalyst” for more regulatory clarity.
Armstrong has claimed that U.S. regulations lack clarity and have driven “95%” of crypto transactions offshore. The Securities and Exchange Commission has filed suit against Coinbase for allegedly violating U.S. securities laws. However, these claims aren’t related to violations of the Bank Secrecy Act or money transmitter licensing issues.
On Nov. 21, the Department of Justice announced that Binance has agreed to plead guilty to violations of the U.S. Bank Secrecy Act and to serving U.S. customers without obtaining the proper money transmitter licenses.