Coinbase CEO Criticized for Suggesting Crypto Industry ‘Moving Offshore’
Coinbase CEO Brian Armstrong has suggested that regulation by enforcement is forcing the industry offshore, but his comments have upset parts of the crypto community.
Armstrong’s comments came in a Twitter thread on Tuesday where the founder railed against the current political and regulatory climate in the United States. It was enough to trigger anger from several quarters.
The US is left behind
In recent years, the US tech industry has found itself playing second fiddle to rivals in Asia, including China, Taiwan and South Korea.
Armstrong sees a parallel within the cryptocurrency sector. As Armstrong argues, the United States is in danger of being left behind and weakened by overindulgent regulation.
“One of the strongest political arguments for cryptocurrency is that it is a national security issue. The US missed semiconductors and 5G which are now largely produced offshore. so Armstrong. “It can’t afford to have cryptocurrency go offshore as well.”
According to the Coinbase CEO, “Regulation by enforcement has a terrible chilling effect,” and “we’ve already seen a huge amount of crypto talent, asset issuers and startups go offshore.”
Armstrong did not provide specific examples to support his claims, and what he was referring to remains unclear. That said, his reference to “offshore” crypto pricked the ears of a number of Twitter users.
As Twitter user asked: “Isn’t the point of crypto to be free of regulation, free of national borders, payment systems for the world, no matter who you are or where you come from?”
Another added“Cryptocurrency is not meant to be bound by geopolitical borders.”
While these ideals may be widely shared in the community, the reality for centralized exchanges and Armstrong is that they must be based somewhere, and Coinbase is headquartered in the US
The policies of Coinbase
Coinbase is an increasingly political organization. As Be[In]Crypto reported last week, the company has created a scoring system to estimate the crypto sentiment, both positive and negative, of various US officials.
While the scoring system is limited to the US for now, the company hopes to roll out their pilot scheme to other jurisdictions over time.
In an interview with CNBC last month, Armstrong said he envisions a future where every company in the world is in crypto. To get there, Coinbase intends to play ball with the regulators.
“We want to be the most compliant, the most regulated, the most reliable product out there in the space,” Armstrong said.
Despite this, it is clear that the CEO is frustrated with certain parts of the American regulatory system. Without naming names, his allusion to “regulation by enforcement” suggests that the highly litigious Securities and Exchange Commission (SEC) is the target of his recent comments.
XRP fans are also unhappy
Ripple (XRP) fans were among those who fired back at Armstrong’s latest intervention, demanding to know when their favorite assets would return to the exchange. Trading of XRP has been suspended on Coinbase since January 2021 thanks to an ongoing investigation by the SEC.
As XRP users see it, if ever there was a good example of indulgent “regulation by enforcement,” Ripple is it.
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