Crypto Execs Ask for Clearer US Regulatory Policy After FTX Collapse

The CEOs of Coinbase, Ripple and Circle called for clearer policy framework in a tweet thread started by Sen. Elizabeth Warren.

AccessTimeIconNov 10, 2022 at 6:37 a.m. UTC
Updated Nov 10, 2022 at 3:55 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The CEOs of Coinbase (COIN), Ripple and Circle said that a lack of a clear framework from regulators was the reason why most of the crypto trading in the U.S. occurs on offshore exchanges – like the now-struggling FTX.

Replying to a tweet by Sen. Elizabeth Warren (D-Mass.) on the collapse of crypto exchange FTX, Coinbase CEO Brian Armstrong said that FTX was not registered in the U.S. Armstrong added that a lack of clarity from the Securities and Exchange Commission is the reason most U.S. trading activity occurred offshore.

Backing Armstrong, Ripple CEO Brad Garlinghouse pointed to the regulatory framework in Singapore as an example.

"Brian is right – to protect consumers, we need regulatory guidance for companies that ensures trust and transparency. There's a reason why most crypto trading is offshore – companies have 0 guidance on how to comply here in the US," Garlinghouse said.

"Compare that with Singapore which has a licensing framework, token taxonomy laid out, and much more. They can appropriately regulate crypto b/c they've done the work to define what 'good' looks like, and know all tokens aren’t securities (despite what Chair Gensler insists)," he added.

Circle CEO Jeremy Allaire also backed Armstrong and added that lack of a proper regulatory framework in the U.S. has left users exposed to the overseas supervisory structure.

In a separate thread Kraken co-founder Jesse Powell echoed the opinions of his peers.

"U.S. lawmakers and regulators have some accountability too. You drove this business offshore because you refused to provide a workable regime under which these services could be offered in a supervised manner. Enforcement wrongfully focuses on convenient, on-shore good actors," Powell added.

The unprecedented collapse of industry heavyweight FTX and its once beloved founder Sam Bankman-Fried has pushed regulators into overdrive, with FTX facing probes from both the Justice department and the SEC.

When asked in September if the SEC would be more proactive in its regulation of crypto exchanges by CoinDesk, SEC Chair Gary Gensler deflected the question.

UPDATE (Nov. 11, 09:42 UTC): Adds comment from Kraken's Jesse Powell.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Parikshit Mishra

Parikshit Mishra is CoinDesk's Deputy Managing Editor responsible for breaking news coverage. He does not have any crypto holdings.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.