Coinbase CEO responds to SEC lawsuit

Coinbase CEO Brian Armstrong has publicly addressed the lawsuit filed by the United States Securities and Exchange Commission (SEC) against his company through a social media post. Armstrong expressed that the team is “confident in our facts and the law” and is looking forward to the opportunity “to finally get some clarity around crypto rules” in court.

Brian Armstrong 🛡️ (@brian_armstrong) / Twitter

The SEC’s lawsuit, filed on June 6, accuses Coinbase of operating as a securities exchange, broker-dealer, and clearing house without proper registration. The filing asserts that 13 cryptocurrencies, including Cardano, Solana, Polygon, and Filecoin, sold by Coinbase meet the definition of securities.

In response, Armstrong stated on Twitter that the lawsuit against Coinbase is unique because it solely focuses on determining the classification of cryptocurrencies as securities. He emphasized the team’s confidence in their understanding of the facts and the law. Armstrong also highlighted the contradictory statements made by the SEC and the Commodity Futures Trading Commission (CFTC) regarding which cryptocurrencies should be considered securities.

Armstrong expressed hope that the legal proceedings would bring much-needed clarity for crypto exchanges to ensure compliance with securities laws. He commended the recent efforts of Congress to introduce legislation aimed at addressing this issue.

This reaction from Armstrong is the latest development in Coinbase’s and the SEC’s ongoing exchange of court files and public statements since March. The SEC issued a Wells notice to Coinbase on March 22, signalling the possibility of enforcement actions. Coinbase’s legal team responded on April 19, claiming that the SEC’s possible action lacked legal backing and exceeded the Commission’s power.

On April 25, Coinbase took a proactive position by filing a complaint against the SEC, alleging a lack of clear and timely regulations for cryptocurrency exchanges, particularly regarding the distinction between securities and non-securities cryptocurrencies. On May 5, the SEC filed a motion to dismiss, and Coinbase answered on May 23 with a mandamus petition in support of their complaint.

As a result, both Coinbase and the SEC find themselves engaged in two separate legal proceedings against each other, with Coinbase initiating the first lawsuit and the SEC responding with their own lawsuit on June 6.