In the wake of guilty pleas from Binance and its founder, Changpeng Zhao, Coinbase CEO Brian Armstrong has expressed optimism that these developments could pave the way for increased regulatory certainty within the cryptocurrency industry.
Armstrong shared his perspective in a post on Tuesday, coinciding with the original scheduled time for a Department of Justice press conference detailing “significant cryptocurrency enforcement actions.” Emphasizing the importance of navigating the regulatory landscape diligently, Armstrong stated, “Today’s news reinforces that doing it the hard way was the right decision.”
The unsealed indictment revealed that Zhao has agreed to step down as the chief executive of Binance and will plead guilty to charges related to the violation of the Bank Secrecy Act, both personally and on behalf of the financial institution.
In response, Zhao affirmed on the platform X that “Binance will continue to grow and excel with the deep bench it has,” announcing former global head of regional markets, Richard Teng, as the incoming CEO. Binance itself has entered a guilty plea for operating as an unlicensed money transmitting business and failing to meet registration requirements. The settlement involves a substantial $1.8 billion fine, with an additional $2.5 billion forfeiture to the government.
“We now have an opportunity to start a new chapter for this industry,” Armstrong commented further 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.”
Despite becoming a public company in 2021 with the goal of enhancing transparency and trust, Coinbase is currently embroiled in a legal dispute with the Securities and Exchange Commission over allegations of operating as an unregistered exchange—a claim the company vehemently denies.
Armstrong affirmed his commitment to the United States, stating, “This industry should be built right here in America, in a compliant way, under US law. 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 experts interviewed by Blockworks on Tuesday suggested that the Binance settlement, coupled with Zhao’s resignation, might contribute to a positive shift in the market cycle.
Bobby Zagotta, the US CEO of crypto exchange Bitstamp, praised the Department of Justice’s actions in a statement, expressing hope for the establishment of a robust regulatory framework in the US. Zagotta emphasized the importance of preventing fraudulent activities by entities like Binance and FTX while fostering the growth of compliant crypto firms.
