Transcript
David Senra (0:02)
How much of your job is building political power as an advocate for, like, the crypto industry?
Brian Armstrong (0:07)
Yeah, I mean, I don't have to go, but I think it's worth it for the business. I don't mind going. I like doing. In some ways, I like doing it. There's some pretty interesting people there. So I go about once a quarter, maybe once or twice a quarter recently, because we're right at the crux of this key moment for market structure. Legislation. But I'd say over the last few years, yeah, about once a quarter.
David Senra (0:25)
What's the key moment for the market structure?
Brian Armstrong (0:27)
Well, the crypto industry has been working for a long time on getting in the Senate. A whole bunch of people have been trying to get this piece of legislation passed. In the House, it was called the Clarity Act. In the Senate, they're drafting their own version of it. But it's. It's essentially clarifying this question about which of these crypto assets are commodities versus securities. And, you know, someone might say, well, why does it matter? It matters because in the United States, we have two different regulate federal regulators, the CFTC and the sec. The CFTC regulates commodities, the SEC regulates securities. And so it turns out in the past this ambiguity about where crypto assets sit between the two federal regulators, that lack of clarity was really weaponized and by Gary Gensler, the former SEC chair and Elizabeth Warren and people like that who tried to, in my view, unlawfully kill the industry in the United States. So in other countries where we operate, like in the UK or in Singapore, they only have one federal regulator for financial services. So they actually don't care whether these are commodities or securities. It's a totally different parochial issue in the United States that's kind of like this turf war between two federal agencies in the past. So anyway, we just decided we need to get legislation passed by Congress to clarify once and for all which of them go in which bucket so that a future Gary Gensler couldn't come in and try to kill the industry.
David Senra (1:39)
So what was the lawfare they were trying to do?
Brian Armstrong (1:41)
Well, okay, so long story, but, you know, essentially this was around, like the 2020, 2021 timeframe Coinbase. We decided we wanted to become a public company. We had been operating for about nine years at that point. And we went in and went through the normal process with the sec. You have to describe your entire company, how it works. You know, how do we decide which assets to list? Which do we not list? At that time, we wanted there to be a path to have crypto securities Be traded. Simple way to think of it is a security is like a way to raise money for a company that you want to start. A commodity is something that's decentralized, kind of like oil or gold or copper or something like that. Right. So bitcoin is decentralized. Nobody controls it. Everyone pretty much agrees bitcoin is a commodity. But there were people issuing tokens which were raising money for different projects they were doing that were in various stage, stages of decentralization. So was it a commodity? Was it a security? And then Gary Gensler, the SEC chair at that time, my understanding is that, you know, he and Elizabeth Warren essentially decided they wanted to use this to curtail the crypto industry. And if you want to know why. Well, okay, so Elizabeth Warren is, you know, in my view, she's a socialist. She believes the government should be running all financial services. And she had essentially found a way to bypass Congress and have a lot of influence over financial institutions like big banks. And she did.