Brian Armstrong: Coinbase ‘Happy To Go To Court’ With SEC To Defend Industry

Coinbase executives this week said the courts could be the best path to clarity for an industry looking for answers

article-image

Artwork by Axel Rangel

share

Coinbase executives doubled down on the possibility of taking the SEC to court a day after the regulator warned the crypto company it could bring an enforcement action against it. 

The SEC hit Coinbase with a Wells notice Wednesday about alleged securities violations. Coinbase said in a statement Wednesday it is “confident in the legality of [its] assets and services,” adding that the regulator’s claims lacked detail about specific problems. 

Coinbase CEO Brian Armstrong said during a Twitter Space Thursday that while the SEC’s move wasn’t totally unexpected, it was “a very strange outcome” after the firm met with the regulator roughly 30 times during the last nine months. 

“I think the courts could maybe actually give us some clarity here,” Armstrong said. “In a way we’re happy to go to court if that’s what it takes to finally get some case law developed for this industry so the industry can be built in a safe, trusted and regulated way here in America.”  

The regulator is targeting Coinbase Prime and Coinbase Wallet, according to the Wells notice — a letter that follows an investigation and precedes a potential enforcement action. 

The SEC declined to comment further.

The SEC’s latest Wells notice against Coinbase reflects a belief by some in the US that crypto industry players seek to take advantage of regulatory loopholes, Crypto Council for Innovation CEO Sheila Warren said in a Thursday statement.

“What’s true is that a reprehensible amount of resources and brainpower have been spent in the US trying to engage with this SEC and trying to create substance and a path out of the wraithlike comments issued by the agency,” Warren said. “Are we really going to allow one agency in the US to set the entire trajectory of an innovation for the entire country, especially if that agency refuses to engage with the industry it is trying to regulate?”

Armstrong said while other US regulators — such as the CFTC and state agencies — have been “reasonable” to work with, the SEC has been “a real outlier.” 

Despite many meetings with the SEC and Coinbase spending tens of millions of dollars in legal fees, Armstrong said, the agency has not offered feedback to the company. 

Policy by enforcement is the “worst possible way” to move a nascent space forward, Coinbase Chief Policy Officer Faryar Shirzad said during the Twitter Space.

Despite a lack of US crypto policy movement thus far, Shirzad said he is confident politicians will start to respond to aggressive actions against the crypto industry.

“I think what you’ll see now over the next few weeks is that Congress is going to step up,” he said.

White House crypto stance said to be “disappointing” 

The warning to Coinbase came the same day the SEC launched a lawsuit against Tron Network founder Justin Sun for allegedly selling unregistered securities. Sun tweeted that the complaint “lacks merit.” 

The SEC’s Office of Investor Education and Advocacy then renewed its warning about crypto risks in an investor alert Thursday, stating that “investments in crypto asset securities can be exceptionally volatile and speculative.”

The alert said that crypto companies may not be complying with federal securities laws. It added that proof-of-reserves efforts “may not provide any meaningful assurance that these entities hold adequate assets to back their customers’ balances.”

The White House has even weighed, saying in its annual Economic Report of the President earlier this week that the design of digital assets “frequently reflects an ignorance of basic economic principles.”

“Indeed, crypto assets to date do not appear to offer investments with any fundamental value, nor do they act as an effective alternative to fiat money, improve financial inclusion, or make payments more efficient,” the report states. “Instead, their innovation has been mostly about creating artificial scarcity in order to support crypto assets’ prices — and many of them have no fundamental value.”

Blockchain Association CEO Kristin Smith called the latest White House report “disappointing.”

“While other countries are increasingly receptive to the burgeoning crypto industry, some in government appear increasingly allergic to its promise, sending companies and innovators offshore,” she said in a statement the day later. “We urge the Biden administration to consider how it will be remembered: as a leader of profound innovation or a roadblock to a global tech revolution.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (19).png

Research

Suilend has grown into the top money market and liquid staking provider on Sui. STEAMM, Suilend’s Superfluid AMM, presents a compelling avenue for growing market share within Sui’s DEX landscape and revenue generation for the protocol. Suilend’s multi-product suite position it well for owning market share across key verticals. While current metrics across the Sui ecosystem are likely inflated due to Sui Foundation incentive programs, SEND trades at amongst the lowest multiples in the lend/borrow sector, suggesting that a bull case for continued growth in the ecosystem may be mispriced.

article-image

Strive board member Ben Werkman expects thousands of firms to hold BTC, if only “to protect themselves”

article-image

To date, 12.6 million humans have scanned at a World Orb

article-image

One small step for man, one giant leap for Bitcoin

article-image

Jay Woods, Chief Global Strategist at Freedom Capital Markets, said it would be “very rare” for an acquisition to happen since the IPO may occur as soon as next week

article-image

Sponsored

Money is one of the most consequential pieces of infrastructure, and M0 believes its architecture should serve builders, not extract from them

article-image

The financial backwaters they laughed at might be the only thing keeping the dollar afloat