Robinhood's Head Of Legal Calls Coinbase's Crypto Policy Proposal 'One Of The Stupidest Ideas'

Dan Gallagher, the chief legal officer at Robinhood Markets Inc HOOD, said Coinbase Global Inc’s COIN proposal to regulate digital assets under a new framework doesn’t make sense.

What Happened: Speaking at a Georgetown University Financial Markets Quality conference, Gallagher said that Coinbase’s proposal to create a new regulator for digital asset markets is “just plain silly.”

"It's one of the stupidest ideas I've heard in this space in a long time," he said.

In his view, attempting to transfer the authority from market regulators like the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission would only further convolute the regulatory environment.

In October, Coinbase put forth its own set of recommendations aimed at resolving the lack of clarity that surrounds how crypto markets are regulated today.

“Responsibility should be assigned to a single federal regulator and a new registration process established for MDAs. A dedicated self-regulatory organization should also be established,” stated Coinbase CEO Brian Armstrong.

After Gallagher’s comments, Coinbase said in a statement that it never called for a new regulator.

"We welcome any discussion on how to reform a system that isn't fit for purpose when it comes to crypto. But to be clear, our proposal never called for a new regulator – it was regulator agnostic. What it calls for is crypto-forward proposals and not using old precedents for a new technology,” a Coinbase spokesperson told Decrypt.

“We welcome the debate and if others have concrete ideas, share them. There's space for everyone to contribute.”

Price Action: Coinbase shares were trading 4.69% higher at $338.74 midday Friday, while Robinhood shares were down 1.9% at $29.94. 

Photo: Pierre Borthiry on Unsplash.