Coinbase Meets Congress Members and Crypto Firms on Regulatory Framework for Crypto

The Nasdaq-listed crypto exchange Coinbase has been meeting with members of Congress to discuss the cryptocurrency regulation it plans to propose, according to CEO Brian Armstrong. In addition, the company has met with more than 30 crypto firms, four major law firms, and three trade groups about its crypto proposal.

Coinbase is on a mission to influence crypto regulation in the U.S. CEO Brian Armstrong tweeted Thursday: “We’ve now met with 30+ crypto firms, 25+ members of congress and/or staff, 4 major law firms, and 3 trade groups about our regulatory proposal for crypto. Our policy team is doing great work and we’re trying to be part of the solution.”

Armstrong first revealed that his company was preparing a draft regulatory framework to submit to lawmakers in an interview at Techcrunch Disrupt 2021 on Sept. 22. He said that he expected to begin distributing the crypto regulatory proposal this month.

The CEO revealed that he had been asked multiple times for a crypto regulatory framework proposal as regulators often seek industry feedback when creating new rules.

He shared during the interview, “When I go to DC, I’ve met with a number of people in government, and they typically will ask us ‘Well, do you have a draft, do you have a proposal of something we could try to shop around about how this could be regulated federally?”

Armstrong noted that Coinbase is currently licensed as a money transmitter and lender in 50 states. He added that Coinbase operates under the purview of the Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Internal Revenue Service (IRS), the Treasury, and the Office of Foreign Assets Control (OFAC).

The Coinbase boss indicated that he prefers a federal framework instead of having to deal with independent state-by-state rules and agencies. He was quoted as saying, “We have a proposal that we actually want to put out there that could help maybe create at least one idea about how to move forward. But this is going to require input from a lot of people.”

Coinbase recently ran into trouble with the SEC over its lending product which the Commission considers to be a security. The SEC threatened to sue the company if it went ahead with the Lend product without registering, prompting Coinbase to abandon its plan to launch the product.

SEC Chairman Gary Gensler recently explained that crypto platforms that accepted funds from investors and offered returns “should consider the securities laws carefully and talk to the agency about getting registered.”