Binance fallout ‘opportunity to start a new chapter for this industry’: Coinbase CEO

Amid guilty pleas by Binance and its founder, Changpeng Zhao, Coinbase CEO Brian Armstrong said the developments could spur greater regulatory certainty going forward.  

“Today’s news reinforces that doing it the hard way was the right decision,” Armstrong said in a Tuesday X post.

The post came at roughly 3 pm ET — the original scheduled time for a Department of Justice press conference to announce “significant cryptocurrency enforcement actions.”

Read more: Yellen: Historic Binance settlement “sends message” to crypto industry

According to an indictment unsealed Tuesday, Zhao agreed to step down as chief executive and will plead guilty to “violating and causing a financial institution to violate” the Bank Secrecy Act. 

In a statement on X, Zhao said “Binance will continue to grow and excel with the deep bench it has” — naming former global head of regional markets Richard Teng as CEO.

Binance agreed to plead guilty to operating as an unlicensed money transmitting business and failing to comply with registration requirements. It is set to pay a $1.8 billion fine and forfeit $2.5 billion to the government.

“We now have an opportunity to start a new chapter for this industry,” Armstrong added in the X post. “We took a lot of arrows operating here in the US due to the lack of regulatory clarity, and my hope is that today’s news serves as a catalyst to finally achieve that.”

Coinbase became a public company in 2021 “to increase transparency and raise the bar on trust” Armstrong noted. Still, the company is engaged in a legal battle with the Securities and Exchange Commission for allegedly operating as an unregistered exchange — charges the company has denied.

“This industry should be built right here in America, in a compliant way, under US law,” Armstrong said. “We’re going to stay here in the US because we believe in economic freedom and that the US democratic system will eventually get this right.”

Industry executives told Blockworks Tuesday that the Binance settlement, and Zhao stepping down, could help pave the way for a bull market cycle.

Bobby Zagotta, US CEO of crypto exchange Bitstamp, applauded the DOJ’s efforts “to establish a level playing field” in a Tuesday statement.

“I express hope for the development of a robust regulatory framework in the US, preventing fraudulent activities by bad actors such as Binance and FTX, while fostering the growth of compliant crypto firms,” Zagotta said.