Recently, Coinbase CEO Brian Armstrong evaluated the state of the crypto industry, telling Axios that "crypto isn't going anywhere." The crypto leader colorfully said the industry was suffering from "a black eye because it’s attracted its unfair share of scammer[s] and fraudulent people over the years. Some of it was just bad management if you look at something like Mt. Gox, but with FTX it appears to be actual fraud."
"But that’s not representative of the entire industry, and crypto isn’t going anywhere. It’s just like Bernie Madoff or someone like that in the traditional financing system. It’s frustrating and makes everyone look more closely at everything," he said.
In the wake of calls for greater regulation of the crypto industry after the FTX collapse, Coinbase CEO Brian Armstrong announced a blueprint outlining what regulatory clarity might look for the nascent crypto industry this month.
Armstrong trumpeted greater regulation of centralized exchanges while advocating for “decentralized innovation” for a number of other crypto entities. Doing so upholds “the decentralized crypto innovations that will bring enormous benefits to the world,” he said.
Armstrong believes stablecoin issuers, exchanges, and custodians should be the first group targeted by regulation. “This is where we've seen the most risk of consumer harm,” he said, “and pretty much everyone can agree it should be done.” He did not say decentralized entities like DeFi or decentralized autonomous organizations or DAOs warranted early regulation.
However, Armstrong did exhort lawmakers to levy an updated version of the Howey test – which determines if an investment is a security – on crypto. “Perhaps the most complex point that needs clarity is around which crypto assets are commodities and which are securities,” Armstrong said.
“The CFTC and SEC have been debating this issue in the U.S. for several years now, but unfortunately, they haven't provided any clarity to the market.”