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Coinbase CEO Brian Armstrong Set to Meet With House Democrats

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Coinbase CEO Brian Armstrong is scheduled to have a private meeting with a group of U.S. House of Representatives Democrats on Wednesday morning to discuss the future of digital asset legislation.

The meeting holds significance as it takes place amidst ongoing legal battles faced by Coinbase and Binance, two of the world’s largest cryptocurrency exchanges, with the U.S. Securities and Exchange Commission (SEC).

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Image Source: bitcoinist.com

The lawsuits filed by the SEC allege that both Coinbase and Binance failed to register their operations with the agency. If successful, these legal actions could have far-reaching implications for the entire crypto market, as they would establish the SEC’s jurisdiction over the industry.

This would contradict the industry’s long-standing argument that tokens should not be classified as securities and therefore should not be subject to regulation by the commission.

In addition to discussing the future of digital asset legislation, Armstrong is expected to address other pertinent issues during the meeting, including tax regulations, national security concerns, privacy considerations, and the climate impact of cryptocurrency operations. A spokesperson for the New Democrat Coalition confirmed these topics in an emailed statement.

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Coinbase has yet to comment on the meeting, as the request for comment was made outside of their business hours. However, the exchange has previously stated that it vehemently denies the SEC’s allegations and is fully prepared to vigorously defend itself in court. Binance has taken a similar stance, rejecting the SEC’s claims and affirming its commitment to fighting the lawsuit.

Brian Armstrong, known for his outspoken criticism of the SEC, has been particularly vocal about his disagreement with SEC Chair Gary Gensler. He has referred to Gensler as an “outlier” among Washington policymakers, expressing his differing views on cryptocurrency regulation.

The upcoming meeting with House Democrats provides Armstrong with an opportunity to present his perspectives and engage in a dialogue on the future of digital asset legislation.

The outcome of this meeting could have significant implications for the regulatory landscape surrounding cryptocurrencies in the United States. As the crypto industry continues to grow and evolve, discussions between industry leaders and lawmakers will play a crucial role in shaping the future of digital asset regulation, with potential ramifications for investors, businesses, and the broader financial system.

The meeting between Coinbase CEO Brian Armstrong and House Democrats holds promise for constructive discussions on digital asset legislation and regulatory concerns in the cryptocurrency industry.

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U.S. SEC threatens to sue Coinbase over some crypto products

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Share prices of Coinbase Global Corp. ended up falling 13 percent in premarket trading after the U.S. Securities and Exchange Commission sent out an announcement stating its intention to suggest punitive action in opposition to the crypto exchange’s products on Thursday.

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Image Source: brandiconimage.com

“We asked the SEC specifically to identify which assets on our platforms they believe may be securities, and they declined to do so,” Coinbase said.

Source: zawya.com

Global regulatory authorities are paying close attention to the cryptocurrency market after a number of high-profile implosions annihilated more than a trillion dollars from the digital money industry’s market capitalization the previous year.

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“This news illustrates the regulatory headwinds and uncertainty facing the crypto industry in the U.S. under the current administration,” said analysts at BofA Global Research.

Source: zawya.com

In the aftereffects of the chaos, the SEC had also brought up examination over some of the crypto services as well as the way companies hold clients’ funds.

Experts at brokerage KBW stated in a remark that they anticipated the SEC to end up serving Coinbase with a Wells warning, and they believe the step will probably generate a cloud over the crypto exchange’s shares.

According to the corporation, the regulatory action is probably connected to facets of Coinbase’s spot section in addition to its staking facility Earn, Prime, as well as Wallet products.

Staking is a procedure during which cryptocurrency owners sign up to participate in the validation of blockchain transactions. These products frequently provide customers with astounding yields.

Kraken consented last month to close down its cryptocurrency staking facility in the United States but also pay 30 million USD in penalties to resolve SEC indictments that it didn’t register for the program.

Sooner in the day, the Securities and Exchange Commission accused Justin Sun, The Chinese cryptocurrency entrepreneur of fraud and accused eight public figures, along with actress Lindsay Lohan, of unlawfully publicizing his crypto assets.

Also Read: Amazon to Cut 9,000 More Jobs, Deepening Biggest Pullback Ever

However, TD Cowen experts think through litigation we can clarify how the rules apply to crypto strategies.

“Litigation is especially important now as the banking crisis has made it even less likely that Congress will enact a regulatory regime for crypto before the 2024 presidential election,” the brokerage wrote in a note.

Source: economictimes.indiatimes.com

Coinbase stated that its services remained operational following the issuance of the notice.

A Wells letter does not always lead to charges or indicate that the receiver has broken the law.

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Coinbase to lay off more employees amid FTX saga

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Leading cryptocurrency exchange Coinbase will shortly announce more layoffs as the industry faces yet another existential threat following the FTX collapse.

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Image Source: bizzbuzz.news

According to recent reports, the present crisis in the cryptocurrency market led Coinbase, one of the biggest crypto platforms, to lay off 60 of its employees. Alesia Haas, CFO, referred to the modifications as “surgical” measures meant to save costs amid trying times.

According to The Information, Coinbase is expected to lay off about 60 employees from its recruitment and institutional induction teams. The layoffs were communicated internally. The layoffs will occur at a time when the cryptocurrency market as a whole is in disarray as a result of the ongoing FTX controversy, which has spooked investors and further depressed cryptocurrency valuations.

Though they are not nearly as astounding as Meta’s decision to lay off over 11,000 employees recently, Coinbase’s most recent series of layoffs is an indication that the crypto exchange may be attempting to cut expenses in the continuing bear market. Nevertheless, this development barely changes the picture of a week that has been filled with terrible news for the cryptocurrency industry.

According to reports, Coinbase had already attempted to minimize costs before the FTX issues as dropping cryptocurrency trading volumes were harming this year’s profitability. Due to the economic slump, the cryptocurrency exchange company stated in June that it will be cutting 1,100 employees or 18% of its workforce.

As the value of Bitcoin and other cryptocurrencies continues to fall, the crash of the FTX cryptocurrency exchange has now brought about yet another wave of threats to the whole crypto industry.

When bitcoin was trading last week at over $21,500 and the market cap was over $1 billion, the cryptocurrency winter, which is expected to linger for the majority of 2022, appeared to have eased its hold. Hopes that a new bull run is about to begin, however, were dashed by FTX’s collapse this week.

At one point, the value of the cryptocurrency market fell below $850 billion, with bitcoin falling to a two-year low of about $15,500.

According to statistics from Nomics, transaction volume on Coinbase fell by over 75% in the hours after FTX announced its bankruptcy early on Friday. This is an indication that the company is starting to feel the pain of crypto investors pulling out of the increasingly unpredictable cryptocurrency market.

The majority of Coinbase’s user base, which consists primarily of newer investors who don’t trade frequently, generates 90% of the exchange’s revenue from the sizeable transaction fees it charges. Because of this revenue model, the company must constantly add new users in order to maintain its user base. Onboarding new users, however, could be challenging given that FTX’s collapse has undermined investor sentiment in the digital asset sector.

The price of cryptocurrencies plummeted this year as a result of rising interest rates and growing concerns about an economic slowdown, wiping out important firms like Three Arrows Capital, Celsius Network, and Voyager Digital. But once FTX started to show early signs of trouble, digital assets took a heavier hit.

FTX, which has a history of saving failing crypto companies, is considering its options in light of a liquidity crisis and is currently under investigation by US regulators for its management of customer cash and its crypto-lending activities.

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Applications Of Cryptoassets Led Coinbase To The Unicorn Club

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We talk about a new era of technology where the Internet has made our lives pretty easier. The modern technologies and types of equipment have been beneficial to our medical, educational and industrial systems as well. But, it is high time we put a little attention to our financial system.

The world is changing but the subject, that is, mankind is constant. Since time immemorial humans have improvised the world. Speaking of the modernization in our financial system, the major population is not familiar with the concept of cryptoassets.

Defining cryptoassets is similar to introducing one to a whole new financial world. They are nothing but digital assets with the implementation of cryptographic techniques. There are no central parties to monitor any transaction. Coinbase is a company based on such digital assets which made billions over the span of seven years.

Coinbase

Currently, Coinbase is the United Nation’s largest crypto assets exchange. In June 2012, Brian Armstrong and Fred Ehrsam founded the company. Within five years the company hit annual revenue of $ 1 billion. The company’s headquarters is based in San Francisco California.

The main products of Coinbase are Bitcoin, Bitcoin Cash, Litecoin, Ethereum and exchange of digital assets. The bitcoin transaction of Coinbase takes place in more than 190 countries worldwide.

Brian Armstrong

Brian Armstrong
Image Sorce: Google

Brian Armstrong completed both his Bachelor’s and Masters from Rice University. While he was an undergraduate student in Computer Science he worked as an intern for IBM. He also worked at Deloitte & Touch for five months.

In August 2003, Brian co-founded UniversityTutor.com and in 2011 he joined Airbnb.com as a software engineer. He resigned when he decided to build Coinbase.

Fred Ehrsam

Fred went to Duke University and has a B.S degree in both Computer Science and Economics. He also carried research on Self-assembling DNA Nanostructures from Duke University.

Fred Ehrsam
Image source – Google

He started off his career as a Trader on GoldmanSachs and worked there for a couple of years. In 2012, he co-founded Coinbase with Brian Armstrong and now serves as the Board of Directors. Fred also co-founded Paradigm in June 2018. He also appeared in Forbes 30 Under 30.

Early History

Back in June 2012, Ben Reeves, co-founder of Blockchain.info was also a part of the founding team of Coinbase. But, due to mismatching of future plans, he left shortly. The company wasn’t in its full form back then. After it participated in the Y Combinator startup incubator program it finally started providing services from October 2012.

Initially, the company launched the service buying and selling bitcoin but who knew it would be a scope of investment in the near future. Once the company sees through it never really had to turn back.

Investments, Growth, and Expansion

The company’s Series A round took place in May 2013. Coinbase raised a funding of $5 million from venture capital firm Union Square Ventures. After a few months, the company again received a funding of $25 million from Andreessen Horowitz, Union Square Ventures and Ribbit Capital.

The next year Coinbase hit a million users. It also implemented a lot of new things in their systems. Some of them were a vault system for secure bitcoin storage and secured insurance for the bitcoin stored in the company’s server.

In 2015, the company received a funding of $75 million from Draper Fisher Jurvetson, New York Stock Exchange, etc. 2017 was a big year for Coinbase as it received the BitLicense. The company was given legal permission to trade in Ethereum and Litecoin. On 5th April 2018, the company formed Coinbase Ventures to invest in companies with similar grounds of interest.

Coinbase Ventures made its first investment on May 20 on Compound Labs.

Acquisitions and Partnerships

Coinbase made its first acquisitions in 2014. It acquired Blockr, blockchain explorer service and Kippt, a web bookmarking company. In the same year, the company came into joint ventures with Overstock, Dell, Expedia, etc. The company also made a deal with PayPal, Braintree and, Stripe which allowed users bitcoin payment.

Recently, Coinbase has acquired a company called Neutrino. The company was acquired for an undisclosed amount. A lot of questions have been coming up since then. Some information came up regarding Neutrino’s founders having a connection with the Hacking Team. Hacking Team is a Milan based company that sells information to the government and clearly has a poor human rights record.

In August 2019, the company announced a hacking attack. A questionable acquisition followed by a hacking attack has clearly put the users in a dilemma. But, Coinbase declared that nothing was compromised and everything is secure.

UK Users will Now Get to Spend Their Cryptos with the New Coinbase Visa Debit Card

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In recent years, people have become more inclined towards investing in Bitcoins and other cryptocurrencies, but still most of the times, they are not sure of how to spend their cryptos. But now, Coinbase has announced that it is going to launch a debit card that will allow people to spend their cryptocurrencies on daily expenses.

coinbase visa debit card
Image Source: clark.com

Although Coinbase had support for the Shift card, a similar card that allowed the users to liquidate their cryptos, and use them to withdraw cash at various stores. But almost two months ago, Shift discontinued its services with Coinbase, and now Coinbase itself has come with a more feature-rich debit card for its users.

The company is launching a debit card along with a Coinbase Card app, that will help the users to manage all their cryptocurrencies and choose among those cryptocurrencies as to which one they want to spend. The app will generate instant receipts, notifications on every transaction and will help the user to manage their crypto balance. The card can also be used for ATM withdrawals with a free withdrawal limit of £200 per month, and also does not have any maintenance cost.

The card is a Visa debit card issued by PaySafe and will cost a 2.49% interest on every purchase made through it. Issuing the card alone will charge the user a £4.95 ($6.48). The card will come with a spending limit of £10,000 ($13,092) per day and every reverse transaction will cost the user a £20 ($26.19).

Earlier in 2017, the London Block Exchange was working on a similar Visa card but failed to launch one. Also, many other companies have developed such cards in the past, but to use those cards the users had to pre-load a specified amount on them.

Coinbase will be responsible for every conversion of the crypto into fiat, and the amount will be deducted on the basis of the current rate of the cryptocurrency. With the Coinbase debit card, the users will be able to spend on movie tickets, food and other similar purchases. For now, the company has only announced the debit card for its UK and EU users.