Coinbase Reverses Its 2018 Testimony To Congress Argues For One Crypto Regulator

Yesterday, Coinbase released a proposed digital asset policy that provides a vision for the regulatory environment for digital assets, including a newly appointed federal cryptocurrency regulator. Coinbase’s new Chief Political Officer, Fariar Shirzad, who joined in May 2021, is the author of the document and previously directed state affairs at Goldman Sachs.

Shirzad offers four policy pillars in the document, including regulating digital assets in a separate framework and appointing a single regulator for digital assets. This treatise is detailed, very carefully, and clearly written. The only obvious detail that cannot be overlooked is that the pillars are almost the opposite of what Coinbase testified before Congress in 2018.

Coinbase Policy Proposal for 2018

Forbes reported back in 2018, as Coinbase CEO at the time, Mike Lempress, pointed out that the United States did not need a new regulator for cryptocurrencies.

At the hearing at the time, entitled “Cryptocurrency Market Research and ICOs”, Lempress dedicated a section entitled “A Comprehensive Federal Regulatory System Is In Today”. A written statement from Lempress stated, “We believe that there is no need for Congress to create a new regulator or a new regulatory system, as federal regulators already have sufficient power to regulate this space effectively. I will. ”

The certificate also states that the four major regulators (SEC, FDIC, FTC, and FinCEN) must be able to regulate Coinbase under applicable law. The only problem is that the regulators are coordinated.

During the debriefing portion of the trial, Congressman David Scott (D-GA) specifically made a Coinbase recommendation. This seems to have multiplied to defend the idea that Lempress does not need new laws or regulators. The exchange between Coinbase House of Representatives for 2018 and Lempres is as follows:

Congressman David Scott (D-GA): In your testimony, you believe that Congress should not create a new regulatory system. They say that federal agencies already have this power and basically think that it’s just a lack of coordination.

But SEC President Clayton and CFTC President Giancarlo told us what state level regulation is because neither the SEC nor the CFTC (both) have regulators. Yes. Moreover, these bodies are regulated at the country level as so-called “translation companies”, so there appears to be a regulatory deficit here. Not just a lack of coordination, but just some, do you see my idea?

Mike Lempress, (Former) Chief Legislator: Yes, thank you, Member of Congress. I want to point out that today is official and long …

Congressman Scott: Are you saying the SEC and CFTC Presidents are wrong? They said they didn’t.

Lempress: No, I said that when we talk about remittance permits, it covers some of our business activities. We are an integrated company in many ways, some of which are government licensed for remittance purposes.

Congressman Scott: But it’s happening at the state level, not the federal level.

Lempress: Out of respect for congressmen, I’m also referring to the state level. He has a household permit from the State of New York. This is a comprehensive consumer protection license covering cryptographic activity in the State of New York. At the federal level there is commodity market regulation, as is commodity market regulation everywhere, and out of respect I say that this new asset still has many product characteristics.

Proposal for Coinbase Policy 2021

In contrast, a new policy proposal by Faryar states that “the laws enacted in the 1930s to promote effective oversight of our financial markets could not have foreseen this technological revolution”. Me. The strategy paper states: “… forcing an entire range of digital assets into the category of coded surveillance before computers are used risks hindering the development of this innovative technology and is therefore currently in the United States. This pushes the company’s innovative focus overboard. “”

According to Faryar’s new proposal, placing digital assets under existing legal jurisdiction has serious and detrimental economic consequences “when technology is critical to the geopolitical power of countries. This will weaken the US leadership. ”

Coinbase declined to comment on the story. Fariar uses social media to announce the company’s work and direct the public to respond on GitHub, but how does this policy position differ from past Congressional recommendations. Not known.