Coinbase and the SEC have struggled with regulatory issues for almost an entire year. The fault for this struggle falls almost entirely on the SEC – Coinbase filed a petition to the SEC to compel them to provide rulemaking processes that can provide guidance to cryptocurrency regulations.
Coinbase filed that petition in July 2022 and the SEC has declined to issue a yes or no answer.
It’s suspected that the SEC will deny the petition request based on their history. However, it’s unusual that they have not responded to Coinbase. This led to Coinbase filing a motion in federal court to compel the SEC to respond to the petition.
I Stand with Crypto is related to this issue Coinbase is having with the SEC – it’s an NFT project meant to organize people around cryptocurrency. This article will explain everything you need to know about I Stand with Crypto and Coinbase’s current issues with the SEC.
Stand with Crypto Background
As mentioned previously, Coinbase has become increasingly frustrated with the SEC for refusing to publicly comment on its regulatory stance in regard to cryptocurrency. Coinbase feels they will be sued by the SEC for breaking regulations, but Coinbase does not know the regulations because the SEC will not publicly state them.
This has led to Brian Armstrong, CEO and co-founder of Coinbase, stating that Coinbase may be forced to exit the United States if they cannot receive regulatory clarity from the SEC.
Armstrong has taken to Twitter to voice his issues, he has spoken to the SEC in Washington DC, he has met with US lawmakers to try and smooth things over, and has purchased half-page advertisements in newspapers to voice his concerns.
He has not received any help.
Coinbase then launched the Stand with Crypto NFT project on April 24th, 2023 to garner more support for cryptocurrency. The next section will go into detail about the project itself and whether or not it’s worth purchasing the NFT.
What is Stand with Crypto?
This is not the standard NFT project with 10,000 JPG animals, stick figures, or other art. It’s simply an image of a blue shield. And all the NFTs have the same image.
More importantly, the NFTs are all free to mint. Buyers only need to pay the gas required to mint the NFT.
This NFT project is meant to garner public support for the SEC to provide a clear regulatory rulebook for cryptocurrency.
Is It Worth Buying a Stand with Crypto NFT?
Whether or not it’s worth purchasing a Stand with Crypto NFT mostly comes down to your personal views on the matter. Most cryptocurrency supporters will support Coinbase in this fight with regulators.
However, this NFT is not worth anything because it’s free to mint.
In our opinion, purchasing this NFT is not a good investment for most investors. If you work in the cryptocurrency industry or have a high-profile Substack blog or Twitter account related to cryptocurrency, then purchasing this NFT could increase brand visibility.
Will This NFT Compel The SEC to Respond to Coinbase?
It has been nearly a year with no response from the SEC, so it seems unlikely that the SEC will change their mind because Coinbase launched an NFT project.
This project is meant to show support for cryptocurrency. Coinbase does not make any money on it – ironically, if they did charge buyers a mint fee, then they could face regulatory issues from the SEC.
Why Did The SEC Allow Coinbase to Go Public?
It makes no sense that the SEC would allow Coinbase to go public and then begin threatening litigation. This is partly why Coinbase is so frustrated with the SEC.
The only logical answer is that the SEC does not want Coinbase to operate in the US, so they are making it extremely difficult for Coinbase to follow any regulations.
Will Coinbase Leave the US?
It appears very likely that Coinbase will leave the US due to the regulatory hurdles that the SEC keeps throwing at them. Armstrong has repeatedly said he will move Coinbase to a different jurisdiction if he does not receive regulatory clarity from the SEC.
This is not an empty threat, either. Coinbase was granted a Digital Asset License by Bermuda in late April 2023 and plans on launching an offshore exchange in the coming weeks.
Will Coinbase Be Available to Americans?
Yes, Coinbase will still be available for Americans in the immediate future. They are simply launching an offshore exchange in Bermuda, not moving their entire operation to the small island nation.
With that in mind, it appears highly likely that Coinbase will exit the United States at some point in the next year or two because of increasing regulatory pressure and uncertainty from the SEC.
Will The SEC’s Regulatory Uncertainty Tank Cryptocurrency?
No, it does not appear that the SEC’s regulatory uncertainty will tank cryptocurrency. The price of Bitcoin is a healthy $27,000 (source: WorldCoinStats). It has decreased slightly over the past few days since Coinbase announced receiving a license to operate in Bermuda.
Fortunately, Bitcoin is very resilient to regulatory hurdles like this. Bitcoin is decentralized by nature, so it’s very difficult for regulators to fully control it. It’s especially difficult now that Bitcoin has become so dominant in global finance.
Regulators could have stopped cryptocurrency when it first launched, but it is way too late to stop it now.
Closing Words
To summarize, Coinbase has faced regulatory uncertainty from the SEC for the past year. Coinbase executives have spoken to the SEC, spoken to politicians in Washington DC, took out half-page ads in newspapers, and sued the SEC in an attempt to compel the SEC to publicly state their regulatory policy in regard to cryptocurrency.
The SEC has held firm on remaining opaque in their regulatory stance.
Coinbase has now gone a step further and launched a free NFT project that allows holders to show support for cryptocurrency. More relevantly, Coinbase is looking at exiting the US market if they do not receive clarity from the SEC on this matter.