Coinbase's CEO, Brian Armstrong, has made a powerful appeal for accountability, urging that the future SEC chair address what he terms the agency’s “unnecessary” cases targeting cryptocurrency. Armstrong is critical of what he views as the SEC’s inconsistent and at times contradictory stances on digital assets, which he argues have fueled frustration and uncertainty within the crypto community.
SEC's Shifting Narrative on Crypto
Armstrong’s post on social media, which included a compilation of past and recent SEC statements, underscores his point: the incoming SEC chair should retract what he considers “baseless cases” and issue a public apology. In his critique, he highlighted multiple instances of the SEC’s changing position.
For example, in a 2017 statement, the SEC commented that digital assets, by themselves, do not constitute securities. However, by 2020, the agency indicated that digital assets could “symbolize” or “reflect” an investment contract. In 2024 alone, the SEC made several conflicting statements on this issue.
In one instance from January 2024, the SEC categorized digital assets as “purely software code.” Merely days later, however, it reversed its position, claiming that these assets “reflect investment contracts.” By October 2024, the SEC had again revised its stance, declaring that digital assets are “not securities.”
A significant point of contention lies in the SEC’s ongoing evaluation of Bitcoin. In 2022, the agency asserted it had never classified Bitcoin as a security. Yet, in 2023, it issued a more ambiguous statement, noting that there might not be a definitive answer to the question. Days after this, the SEC pivoted again, stating that Bitcoin does not qualify as a security.
Armstrong’s call for a retraction of these cases and an official apology highlights a broader sentiment shared within the crypto community, which has long criticized the SEC for what it perceives as regulatory overreach and an inconsistent approach to digital assets. Armstrong contends that trust in the SEC must be restored, as its approach has potentially inflicted long-term damage on the U.S. financial environment.
A Leadership Shift on the Horizon
This criticism arrives at a crucial juncture, as the U.S. presidential election nears. The Democratic Party’s leadership has largely adopted a cautious, often adversarial stance toward cryptocurrency, a move that some fear could weaken the U.S. dollar’s standing as a global reserve currency. Presidential candidate Kamala Harris has largely remained silent on cryptocurrency matters throughout her campaign.
Conversely, former President Donald Trump has recently garnered support from the crypto community, with promises to remove current SEC Chair Gary Gensler from his position if re-elected. Trump has pledged to appoint an SEC chair who prioritizes innovation in the sector, vowing to foster growth rather than hindering it.