The crypto space in the U.S. remains largely unregulated for now.
Brian Armstrong, CEO of leading cryptocurrency exchange Coinbase, said that multiple regulators will likely be needed to oversee the crypto industry. He made these remarks during a recent podcast interview.
Armstrong suggested that cryptocurrencies are unlikely to be regulated solely by the U.S. Securities and Exchange Commission (SEC). He explained:
“This is what I realize. Crypto will be many different things. It will not be a single regulator handling it. Consider cryptocurrencies like Bitcoin — it is pretty clearly a commodity. Or Ethereum. Many of these are commodities that probably should be regulated by the commodities regulator, the CFTC.”
He added that if companies raise funds using security tokens, those offerings should be treated as securities and fall under SEC oversight. Armstrong emphasized that the SEC needs to clarify which crypto assets it considers securities.
Beyond typical cryptocurrencies, there are stablecoins pegged to fiat currencies. Armstrong said a different agency should oversee stablecoins. He stated:
“Separately, there are also some cryptocurrencies that will act as currencies, like stablecoins, and perhaps the Treasury should regulate those. Finally, there will be cryptocurrencies that are none of the above — they are art or other items that probably shouldn’t be regulated.”
The Coinbase CEO argued regulators must strike the right balance between protecting investors and fostering innovation in the crypto ecosystem. He added:
“We want to balance protecting people, but we also want to ensure the government is not in a position of picking winners and losers. Just because something is legal doesn’t make it a good investment.”
Armstrong reiterated Coinbase’s willingness to work with regulators to eliminate fraud in the crypto space. At the same time, he warned against policies that would block ordinary investors from participating. He said:
“I want to work with anyone in government to prevent these things from happening. The danger is if we ever get to a place where we say only wealthy people can invest because of some accredited investor test. That in itself is exclusionary. I don’t like the accredited investor laws.”
Coinbase is a publicly traded U.S. company and one of the largest cryptocurrency exchanges by market capitalization.