- Coinbase CEO said regulation by enforcement has a terrible chilling effect.
- Brian Brooks of Bitfury attacked the US SEC for its litigious management of crypto projects.
- In the SEC vs. XRP case, Ripple said no contract exists between the company and XRP investors per the Howey Test requirement.
Brian Armstrong, the CEO of Coinbase, a leading crypto exchange, argued on Twitter early today that “regulation by enforcement has a terrible chilling effect.”
One of the strongest policy arguments for cryptocurrency is that it’s a national security issue. The US missed on semiconductors and 5g which is now largely manufactured offshore. It can’t afford to have cryptocurrency go offshore as well. (same for every country btw)
— Brian Armstrong (@brian_armstrong) September 20, 2022
Armstrong made the statement while reflecting on how regulatory bodies force Web3 start-ups to abandon the United States and settle elsewhere.
In Armstrong’s words:
One of the strongest policy arguments for cryptocurrency is that it’s a national security issue. The US missed semiconductors and 5g, which is now largely manufactured offshore.
Being the founder of the largest US-based crypto exchange, Armstrong noted that he couldn’t afford to have cryptocurrency go offshore as well. He pledged to fight to ensure crypto succeeds in the US, for everyone because crypto is too important to America and the free world.
In the same vein, the CEO of Bitfury, Brian Brooks, attacked the US Securities and Exchange Commission (SEC) last month for its litigious management of cryptocurrency projects.
Brooks alleged that the regulator keeps silent on the rules, only to sue people after they launched a project, started a company, and listed a token.
Illustratively, the blockchain firm Ripple Labs Inc (XRP) has been in a multi-year legal battle with the SEC after the regulator filed an action against the company and two of its executives. The SEC alleged that the company raised over $1.3 billion through an unregistered digital asset securities offering.
Ripple argued that there was no contract between the company and XRP investors and that there was no joint enterprise, per one of the requirements under the Howey Test.
According to Ripple, the SEC has failed to identify any investment contract and “cannot satisfy a single prong of the Supreme Court Howey test.”