1/ Some really sketchy behavior coming out of the SEC recently.
Story time…
2/ Millions of crypto holders have been earning yield on their assets over the last few years. It makes sense, if you want to lend out your funds, you can earn a return. Everyone seems happy.
3/ A bunch of great companies in crypto have been offering versions of this for years. Coinbase came out recently and said we would be launching our own version.
4/ We were planning to go live in a few weeks, so we reached out to the SEC to give them a friendly heads up and briefing
5/ They responded by telling us this lend feature is a security. Ok - seems strange, how can lending be a security? So we ask the SEC to help us understand and share their view. We always make an effort to work proactively with regulators, and keep an open mind.
6/ They refuse to tell us why they think it's a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why.
7/ Look….we're committed to following the law. Sometimes the law is unclear. So if the SEC wants to publish guidance, we are also happy to follow that (it's nice if you actually enforce it evenly across the industry equally btw).
8/ But in this case they are refusing to offer any opinion in writing to the industry on what should be allowed and why, and instead are engaging in intimidation tactics behind closed doors. Whatever their theory is here, it feels like a reach/land grab vs other regulators.
9/ Meanwhile, plenty of other crypto companies continue to offer a lend feature, but Coinbase is somehow not allowed to.
10/ Gensler in his confirmation hearing: “It’s important for the SEC to provide guidance and clarity,” Gensler said. “Sometimes that’s a clarity that will be a thumbs up, but even if it’s thumbs down, it’s important to provide that.” March 2, 2021
11/ If you don't want this activity, then simply publish your position, in writing, and enforce it evenly across the industry.
12/ Ostensibly the SEC's goal is to protect investors and create fair markets. So who are they protecting here and where is the harm? People seem pretty happy to be earning yield on these various products, across lots of other crypto companies.
13/ Shutting these down would arguably be harming consumers more than protecting them, and by preventing Coinbase from launching the same thing that other companies already have live, they're creating an unfair market.
14/ In May of this year I traveled to DC to meet with every regulator and branch of government I could.
15/ The SEC was the only regulator that refused to meet with me, saying "we're not meeting with any crypto companies". This was right after we became the first crypto company to go public in the U.S.
16/ Gensler had been confirmed just a month prior, so I brushed it off as the SEC still getting its feet under it. Now I'm not so sure.
17/ We've always tried to be good actors in the space - leaning in to sensible regulation even when it is difficult or expensive. We try to think about what products we would want for ourselves, and what risks we would want our families to be aware of, before launching products.
18/ We will keep following this approach.
19/ Yet here, we're being threatened with legal action before a single bit of actual guidance has been given to the industry on these products.
20/ If we end up in court we may finally get the regulatory clarity the SEC refuses to provide. But regulation by litigation should be the last resort for the SEC, not the first.
21/ Our door remains open. Hopefully the SEC steps up to create the clarity this industry deserves, without harming consumers and companies in the process. America could really use us all working together to figure this out right now.

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More from @brian_armstrong

14 Sep
Apple taking a 30% cut on all digital payments on the iPhone is a bad policy that harms its customers, and it's great they are finally seeing pressure to change this.

It's so silly the number of things you can't buy without dropping going into a mobile browser (Audible books, etc). Many people who have been on iPhone a long time don't realize how much better this is on Android (Google enforces this less strictly, although not perfect).
If Apple had the courage, they should probably see the writing on the wall, and make this change voluntarily instead of having courts slowly force their hand over many years. Short term pain (from loss of revenue), but it would probably come back to them in spades long term.
Read 4 tweets
27 Aug
1/ One thing we're working on at Coinbase is improving our "crypto forward" hiring and culture. A couple quick thoughts on this…
2/ As we've grown as a company, we sometimes haven't had the best reputation for being on the cutting edge of crypto. This makes sense - we grew so quickly, that a lot of time went into just scaling and operationalizing the existing products we have, which was existential for us.
3/ We didn't always have the time to focus on the cutting edge stuff, when we were just trying to keep the existing stuff running. A high quality problem to have, but a problem none the less.
Read 18 tweets
10 Aug
1/ While the damaging language in the infrastructure bill remains, we all owe Sens. @RonWyden @SenLummis and @sentoomey enormous thanks for their work trying to protect innovation and the future of crypto in the United States.
2/ Senator @RonWyden has been a stalwart in advancing sound tech policy, and he deserves enormous thanks and praise from the American people for his leadership and resolve in pushing for sensible crypto provisions in the infrastructure bill.
3/ Sens. @SenLummis & @sentoomey deserve special thanks for their leadership too, finding common ground with @UStreasury, @SenatorSinema, @senrobportman & @MarkWarner on the crypto tax reporting language. This agreement should play a central role in Treasury’s implementation.
Read 12 tweets
6 Aug
1/ There are a few key moments that define our future. One is happening now in the Senate w/ the infrastructure bill. At the 11th hour @MarkWarner has proposed an amendment that would decide which foundational technologies are OK and which are not in crypto. This is disastrous.
2/ Senator @MarkWarner has asked for proof of stake validators to comply with the impossible, but not proof of work miners. Why? It’s not clear, but we could find ourselves with the Senate deciding which types of crypto will survive government regulation.
3/ This is the government trying to pick winners and losers in a nascent industry today, where some new technology is being developed every month. They are guaranteed to get it wrong, by writing in a few exceptions by hand today.
Read 10 tweets
6 Aug
Just called - was pretty quick and painless.
The number of crypto holders in the U.S. is somewhere between 10 and 50 million. This is becoming a very powerful constituent.

It's surprising to me that Senators like @RobPortman and @MarkWarner are willing to go against this many Americans.
They are using @SenatorSinema's name as the third person in support of this, but we're hearing behind the scenes that she has asked to have her name taken off the list.

She should come out and say this publicly, or she'll wind up associated with this anti-crypto move.
Read 4 tweets
4 Aug
1/ If you’ve been following threads on the Infrastructure bill, you know that there is a hastily conceived provision related to digital assets. This provision could have a profound negative impact on crypto in the US and unintentionally push more innovation offshore.
2/ Coinbase is happy to help customers fulfill tax obligations just like the rest of the financial services industry. We've been doing this for years, and issuing more 1099s is a great idea. barmstrong.medium.com/coinbase-and-t…
3/ But the bill defines “brokers” to include anyone who “effectuates transfers of digital assets.” This means almost anyone in the crypto ecosystem (miners, validators, smart contracts, open source developers etc) could be treated as a “broker” with massive reporting obligations.
Read 10 tweets

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