Coinbase CEO Brian Armstrong Criticizes Regulatory Overreach: 'Nothing To Capture In Small Government' (UPDATED)

Editor’s Note: This story has been updated to include a comment from an FDIC spokesperson.

Brian Armstrong, CEO of Coinbase, criticized the government’s overreach and lack of transparency amid the ongoing tussle between the cryptocurrency industry and regulatory bodies.

What Happened: On Monday, Armstrong raised concerns about the “political capture” of government agencies, which emboldens them to make decisions on matters beyond their jurisdiction.

“This is part of the problem with big government – it tends to get captured politically and start painting outside the bounds of the law,” Coinbase’s top executive said. “If you have small government, there is nothing to capture.”

This is part of the problem with big government – it tends to get captured politically and start painting outside the bounds of the law

If you have small government, there is nothing to capture. https://t.co/ceqXP0i1Hy

— Brian Armstrong (@brian_armstrong) November 4, 2024

The critical remark came in response to Coinbase’s legal head Paul Grewal’s claims about the Federal Deposit Insurance Corporation (FDIC) instructing banks to halt or refrain from offering cryptocurrency-banking services.

“So far we’ve uncovered more than 20 examples of the FDIC telling banks to "pause" or "refrain from providing" or "not proceed" with offering crypto-banking services. The public deserves transparency, not an agency that's working behind a bureaucratic curtain,” Grewal wrote in an X post.

An FDIC spokesperson told Benzinga that remarks by Coinbase executives misinterpret their guidance to banks- this only I rephrased.

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Why It Matters: Armstrong’s comments come in the wake of Coinbase’s ongoing legal battle with the SEC and the FDIC. The cryptocurrency behemoth sued these agencies over attempts to hinder the industry’s access to the banking sector and failing to comply with Freedom of Information Act requests.

Armstrong has previously criticized the SEC for its inconsistent positions on matters such as whether digital assets qualify as securities and if the SEC has the authority to regulate cryptocurrency exchanges. He said that the SEC’s approach has caused confusion and undermined trust in regulatory clarity for digital assets.

Coinbase is the largest cryptocurrency exchange in the U.S., allowing trading for coins such as Bitcoin BTC/USD, Ethereum ETH/USD, and many more. The platform facilitated trades worth over $2 billion over the last 24 hours, according to CoinGecko.

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