Brian Armstrong seeks a clear regulatory framework
The US Securities and Exchange Commission continues investigating platforms that have broken the law by putting investors and their funds at risk. All of it comes down to categorizing their staking services under securities. A slight objection has now come from Brian Armstrong, the Chief Executive Officer of Coinbase, stating that those services should not be mixed with securities.
Brian has also emphasized the significance of establishing a clear set of rules to support modern policies and the potential innovation brought by crypto ventures. After FTX collapsed and put a lot of investors at risk of losing their money, the SEC moved quickly to crack down on crypto ventures. However, Coinbase has said that it maintains good relations with the SEC and regulators in its operating regions—Canada, Europe, and Asia.
A justification from Brian explains why staking services should not be mixed with securities. He has said that customers never turn their assets over to a platform that merely provides the service of facilitating staking on a decentralized protocol.
He has further stated that Coinbase is happy to follow all the rules, provided they are drafted to preserve the innovation potential.
Coinbase has taken a hit in terms of revenue, with the number standing at $629 million for the three-month quarter that ended in December 2022. It represents approximately a quarter of the $2.5 billion reported earlier in the same year. The loss on the books stands at $557 million, with revenue pulled down by 75% in Q4.
A number of scandals and bankruptcies have triggered the fall within Coinbase, leading to a 20% job cut in January. The venture previously let go of the employees in June 2022 by 18%.
Numbers related to market share put forward a worrisome picture for Coinbase. CryptoCompare reported that it decreased from 5.9% in November 2022 to 4.1% in February 2023.Binance, on the other hand, is seen as having gained a market share of 60% in the last month.
While it remains to be seen how many more job cuts Coinbase will see this year, Brian has clarified that the year is dedicated to improving EBITDA, short for Earnings before Interest, Tax, Depreciation, and Amortization. As per a Coinbase review, the venture is one of the leading platforms across the globe, with over 56 million verified users holding more than $20 billion in assets.
The crypto exchange platform started its journey with BTC, but it has now expanded its horizons to meet the demands of its widespread community.
Brian Armstrong has assured the SEC that their interests are aligned as long as actions are taken while preserving technological innovations. Assuming the SEC determines that the crypto on the platform is a security, Coinbase will likely pursue it legally, as mentioned in the annual report released on Tuesday.