Brian ArmstrongCo-founder and CEO of Coinbase Global Inc COINthe largest cryptocurrency exchange in the US, has commented on the regulatory crackdown on the crypto industry, reiterating that the exchange’s staking product should not be classified as a security.
On a Bloomberg TV interviewHe explained that Coinbase’s staking product is not a security as clients never commit their assets to the exchange.
Instead, Coinbase simply offers a service that allows customers to participate in staking, a decentralized protocol that generates revenue by allowing users to facilitate transactions on a blockchain, he said.
This stance puts Armstrong at odds with the chairman of the Securities and Exchange Commission Gary Genslerwho has raised concerns about the regulatory status of staking.
Coinbase has received investigative subpoenas from the SEC over staking, stablecoin, and revenue-generating products, but the company has said it cannot remove a specific cryptoasset, even if the SEC claims it is a security, until a final court decision decision is available.
Also read: UBS strategists dismiss fears of Bitcoin crash due to Mt. Gox paybacks
Armstrong is ready to defend Coinbase’s staking product in court if necessary, but stressed that the company is not looking for a fight and wants to work with regulators around the world.
Coinbase’s competing exchange, octopusrecently finalized a settlement with the SEC to shut down its US staking business, where clients earned returns on tokens.
Paxos Trust Co. also stopped issuing one USD from the Binance brand USD/USD stablecoin under Pressure from New York regulators.
The SEC has also put forward a proposal to tighten regulation of cryptocurrency custody.
Despite these challenges, Armstrong said he’s not worried about the broader stablecoin sector in digital assets and is bullish USD coin USDC/USDone dollar tied Stablecoin issued by Circle.
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