Founded in 2012 by Brian Armstrong and Fred Ehrsam, Coinbase has grown to become one of the largest cryptocurrency trading platforms in the world. In 2023, Coinbase officially launched the "Stand with Crypto" initiative, creating an official blog and sparking discussions across numerous news outlets and social media platforms. This initiative was part of an effort to advocate for clear and supportive cryptocurrency regulations in the United States.
In 2023, the U.S. crypto industry faced intense regulatory pressure, particularly from actions taken by the Securities and Exchange Commission (SEC). The SEC filed lawsuits against several major cryptocurrency exchanges, including Coinbase and Binance, accusing them of illegally selling unregistered securities. However, both Coinbase and Binance have disputed these claims, asserting that their platforms do not involve securities trading. Coinbase, in particular, expressed shock over the lawsuit, noting that it had previously passed an SEC review.
As of now, both lawsuits are ongoing, with no final rulings yet issued. The legal battles have garnered widespread attention and have spurred the crypto industry to call for a clearer regulatory framework. Many in the industry are concerned that such lawsuits could hinder future innovation and growth.
Additionally, the collapse of several crypto-friendly banks has further compounded the challenges facing the industry.
During periods of market volatility, particularly after the collapse of platforms like FTX, customers rushed to withdraw their funds, causing many crypto-friendly banks to face liquidity shortages. These banks also failed to properly manage the interest rate risk between their long-term investments and short-term liabilities, leading to financial imbalances. Meanwhile, regulatory scrutiny of crypto-related banks intensified, further damaging market confidence and resulting in a vicious cycle of bank failures. In early 2023, crypto-friendly banks such as Silvergate Bank, Signature Bank, and Silicon Valley Bank all went under. These failures have had a significant impact on the operations and cash flow of the cryptocurrency industry.
On the "Stand with Crypto" website, Coinbase aims to mobilize crypto supporters to engage in the political process by showcasing U.S. legislators' and presidential candidates' stances on cryptocurrency policies. The site lists key political figures' attitudes toward the crypto industry, categorizing them as supportive, opposed, or neutral, helping voters identify which candidates are committed to advancing legislation favorable to crypto innovation. Coinbase encourages users to vote for candidates who have a positive stance on the industry and advocates for establishing a more transparent and clear regulatory framework to ensure the sector's growth.
As the U.S. election approaches, Coinbase's "Stand with Crypto" initiative demonstrates the crypto industry's proactive response to significant challenges. Given that Coinbase is headquartered in California, a Democratic stronghold, its choice to engage in this public political action to garner policy support shows that it is not only advocating for innovation but also adopting this strategy as a necessary measure for its own survival.
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