Investing
Coinbase expects US to be crypto-friendly irrespective of election outcome By Reuters
By Niket Nishant and Manya Saini
(Reuters) – The next U.S. administration will be “constructive” on crypto regardless of which party wins, Coinbase (NASDAQ:) CEO Brian Armstrong said late on Thursday, underscoring the industry’s growing political influence ahead of the November election.
The highly volatile crypto sector is seen as a risky fringe industry and has drawn intense scrutiny from the U.S. Securities and Exchange Commission, which has accused it of flouting securities laws.
But support from Wall Street institutions and corporate titans like Elon Musk and the approval of U.S. exchange-traded crypto funds have boosted its mainstream appeal. The Republican and Democratic parties have also acknowledged the industry’s growing clout in recent weeks.
“(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.
The largest U.S. crypto exchange is fighting the SEC in court after the regulator sued Coinbase last year alleging it failed to register as an exchange.
Meanwhile, three major pro-crypto super political action committees – Fairshake, Defend American Jobs and Protect Progress – that did not exist until this election cycle – have raised more than $230 million to support friendly candidates.
That campaign is moving the needle for both parties. Republican presidential candidate Donald Trump vowed to create a “stockpile” of bitcoin last week. Democratic vice president Kamala Harris’s advisers have also reached out to top crypto companies to “reset” relations, the Financial Times reported.
“Donald Trump is pro-crypto which theoretically creates a tailwind for the industry if he wins,” Dan Coatsworth, investment analyst at AJ Bell told Reuters.
“We don’t yet know Kamala Harris’ position but there are reports she could take a softer stance… than Joe Biden.”
That would be major win for the sector, which for years warned that the SEC crackdown will push crypto entrepreneurs overseas.
Mike Colonnese, an analyst at brokerage H.C. Wainwright & Co, said a regulatory shift “has the potential to bring a new wave of institutional capital into the space that would’ve otherwise been sidelined”.
‘CHEVRON DEFERENCE’
Coinbase CEO Armstrong lauded a recent Supreme Court decision that overturned a doctrine called “ Chevron (NYSE:) deference” that had called for judges to defer to federal agency interpretations of laws deemed to be ambiguous.
Widely viewed as a blow to federal agency powers, the ruling said it is the job of courts, not agencies, to interpret laws.
“We see this case as a sign of Supreme Court skepticism to agency overreach, which we view as a positive overall for our industry,” said Armstrong, a vocal critic of the SEC.
Coinbase last month added to its board former U.S. Solicitor General Paul Clement, a lead lawyer on the case which led to the Chevron ruling.
“Shifts in the U.S. election landscape and the Supreme Court’s overturning of the long-standing Chevron precedent has changed our view on Coinbase’s regulatory risks,” analysts at Citigroup wrote in a note last month.
Read the full article here
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