Brian Armstrong, CEO of cryptocurrency exchange Coinbase, believes that new government regulation against “bad actors” in the crypto industry will finally allow digital currencies to “turn the page” on the scandals of the recent past. Armstrong’s commentary comes immediately after rival exchange platform Binance was hit with a historic $4 billion money laundering settlement by the US Department of Justice — a move that has left Coinbase poised to return as the king of crypto.
As Valuetainment previously reported, Binance, the world’s largest cryptocurrency exchange platform, reached a plea agreement with federal prosecutors last week, ending a years-long fraud investigation. The Department of Justice alleged that the shady international company had not established sufficient protections against money laundering, allowing narcotics dealers, sex traffickers, and even terrorists to fund their operations through the platform.
According to the agreement, Binance will pay a series of fines totaling $4.3 billion for violating U.S. anti-money laundering law, a conspiracy charge, and violating the International Emergency Economic Powers Act. Company CEO Changpeng “CZ” Zhao pled guilty to causing a financial institution to violate the Bank Secrecy Act, accepted a $50 million fine, and resigned from his executive position.
“The enforcement action against Binance, that’s allowing us to kind of turn the page on that and hopefully close that chapter of history,” Coinbase CEO Brian Armstrong told CNBC on Monday. “There are many crypto companies that are helping build the crypto economy and change our financial system globally. But many of them are still small startups. I think that regulatory clarity is going to help bring in more investment, especially from institutions.”
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Armstrong, who co-founded Coinbase in 2012, has marketed his platform as “the good guy” of the cryptocurrency industry, often partnering with lawmakers and the Securities and Exchange Commission in a way that few other crypto enthusiasts are willing to consider.
When Binance launched in 2017, the less-regulated platform quickly overtook Coinbase, which itself had replaced Mt. Gox as the number-one crypto exchange in the world. Like Binance, Mt. Gox had also been mired in accusations after losing (or possibly stealing) hundreds of thousands of bitcoins. The platform ceased operations in 2014.
Shortly before the downfall of Binance, rival exchange FTX was also destroyed by fraud allegations, and founder Sam Bankman-Fried was convicted on multiple criminal counts. But according to Armstrong, the nefarious behavior of these “bad actors” is not indicative of crypto’s true purpose.
“It’s true that there have been some small amount of illicit activity in crypto but it’s actually less than 1% from what we’ve seen,” he said. “If you look at illicit uses of cash, it’s oftentimes more than that.”
However, Coinbase itself is not immune to legal challenges. In June—just 24 hours after charges were filed against Binance—the SEC sued Coinbase for allegedly selling unregistered securities. Even so, Armstrong remains positive about his company’s future and even welcomes government oversight.
“We feel very good about our case with the SEC and our chances there,” he said. “Regardless of the outcome, it’s going to help us with our goal of getting regulatory clarity.”
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