While the rest of the crypto industry takes turns to bid Changpeng Zhao ‘CZ’ good tidings, Coinbase’s Brian Armstrong has taken the opportunity to flaunt Coinbase as a regulatory-compliant crypto exchange. His tweet on X has not sat right with many crypto investors, as they call him out on hypocrisy.
Brian Armstrong paints Coinbase ‘compliance-ready’
Brian Armstrong, CEO of crypto exchange Coinbase, believes his company made the correct decision in complying with US money transmitter licensing requirements.
In a Nov. 21 social media post, Brian Armstrong reacted to the news that rival exchange Binance is pleading guilty to criminal charges, saying he is delighted his own exchange decided to secure money transmitter licenses despite the fact that 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 with our customers and following the rules.
We wanted to increase transparency and raise the bar on trust, so we became a public company in 2021. This meant we couldn’t always move as quickly as others.
Brian Armstrong
Brian Armstrong further criticized what he perceives to be a lack of regulatory clarity in the United States, alleging that it is driving users to offshore exchanges such as Binance.
According to him, Americans should not be required to use this technology on unregulated offshore exchanges. Nevertheless, he maintained an optimistic stance, asserting that the possible outcome of the U.S. criminal case against Binance could serve as the “catalyst” for greater regulatory transparency.
Crypto community reactions show no mercy
Crypto investors’ reactions on X following Brian Armstrong’s remarks are not near kind. One user stated, “Blackrock is saving you. Your exchange is not profitable (can’t work in tradfi). And too many high-level people have already a feet in crypto. Not super well played Brian. We’ll stick with Dex and cultivate real decentralized projects.” That was just the start, another X user said:
Crypto investors were quick to add that despite Brian Armstrong’s regulatory endeavors, Coinbase still got sued. Another added, “So it was actually a US v Others all along? Shame on you Brian.”
How will CZ and Binance fair after this? Although Zhao will be barred from any role with Binance for at least three years, according to the government’s rules, he might potentially operate as an informal liaison between the firm and its main shareholder.
While the criminal offense Zhao pleaded guilty to carries a possible sentence of ten years in prison and a fine of $500,000, it’s unclear what federal prosecutors will propose he serves under the arrangement. However, the former Binance CEO is projected to spend little more than 18 months in prison.
Bloomberg reporter James Seyffart was quite aback by the probable time spent for CZ in comparison to rival exchange creator Sam Bankman-Fried. “That’s a lot less than SBF,” the reporter tweeted.
