Coinbase Chief Executive Sees Political ‘Shift’ On Crypto

Brian Armstrong, the chief executive of Coinbase, the largest US cryptocurrency exchange, has said he believes there is a bipartisan shift in favour of the crypto industry and that it is “now being taken seriously” in Washington.

He told investors the company has seen a “shift from both sides” and that there is no disproportionate support from one particular party, irrespective of who may win in November’s US elections.

“(Crypto) advocates are making their voices heard as an important voting bloc. Politicians on both sides of the aisle have taken notice, and there is growing momentum to pass comprehensive crypto legislation,” Armstrong told analysts at an event announcing the company’s quarterly earnings.

The crypto industry has faced intense scrutiny from governments and regulators worldwide, including the US Securities and Exchange Commission (SEC), which sued Coinbase last year for failing to register under securities laws, charges the company is fighting in court.

Political donations

Coinbase is one of the major contributors to super political action committees such as Fairshake, Defend American Jobs and Protect Progress, which have raised $230 milion (£180m) to support candidates.

Amidst generous campaign spending Republican presidential nominee Donald Trump has made positive comments about crypto while advisers for vice-president Kamala Harris have contacted crypto companies to “reset” relations, the Financial Times reported.

Major Wall Street institutions and tech billionaires such as Elon Musk have supported the industry while the SEC approved Bitcoin exchange-traded funds this year, bringing the sector closer to the mainstream.

Meanwhile Citigroup analysts upgraded shares in Coinbase last month, citing an improved regulatory landscape for crypto-assets in the US.

In part this was due to a Supreme Court ruling overturning the so-called “Chevron deference” rule that called for judges to defer to federal agencies in interpreting laws deemed ambiguous.

Regulatory shift

“Shifts in the US election landscape and the Supreme Court’s overturning of the long-standing Chevron precedent has changed our view on Coinbase’s regulatory risks,” Citi analysts wrote.

Armstrong said he saw the case as “a sign of Supreme Court scepticism to agency overreach, which we view as a positive overall for our industry”.

Last month former US solicitor general Paul Clement, a lead attorney in the case that led to the Chevron ruling, joined Coinbase’s board.

The SEC in January officially approved the first US-listed Bitcoin ETFs

in what was considered a watershed moment for the world’s largest cryptocurrency, as well as the broader crypto industry.

“We are now faced with a new set of filings similar to those we have disapproved in the past. Circumstances, however, have changed,” said SEC chair Gary Gensler at the time.