The crypto space in the United States remains largely unregulated.
Brian Armstrong, CEO of leading cryptocurrency exchange Coinbase, said recently in a podcast interview that multiple regulators will likely be needed to oversee the crypto industry.
He explained that cryptocurrencies are unlikely to be governed solely by the U.S. Securities and Exchange Commission (SEC).
“Here’s what I’ve realized. Crypto will be many different things. It won’t be a single regulator handling everything. Think about crypto like Bitcoin — that’s clearly a commodity. Or Ethereum. Many of these assets are commodities and should probably be regulated by the commodities regulator, the CFTC.”
Armstrong added that if people raise money for a company using security tokens, those tokens should be regulated by the SEC as securities. However, he noted the SEC must provide clarity about what it considers a security within the crypto sector.
Beyond typical cryptocurrencies, there are stablecoins pegged to fiat currencies. Armstrong believes a different agency should oversee stablecoins:
“Separately, there will be some cryptocurrencies that function as currencies, like stablecoins. Perhaps the Treasury should regulate those. Then there will be crypto that is none of the above — digital art or other items that probably shouldn’t be regulated in the same way.”
The Coinbase CEO argued regulators must strike the right balance between protecting investors and encouraging innovation within the crypto ecosystem. He said:
“We want to balance protecting people, but we also do not want the government in a position where it picks winners and losers. Just because something is legal doesn’t mean it’s a good investment.”
Armstrong reiterated Coinbase’s willingness to cooperate with regulators to eradicate fraud in crypto, while stressing he does not want government actions that make market access difficult for ordinary investors.
“I want to work with everyone in government so that doesn’t happen. The danger is we get to a place where only wealthy people can invest because there’s some kind of accredited investor test. That’s inherently exclusionary. I don’t like accredited investor laws.”
Coinbase is a publicly traded company in the United States and one of the largest cryptocurrency exchanges by market capitalization.