Coinbase CEO Brian Armstrong has suggested that the incoming chair of the U.S. Securities and Exchange Commission (SEC) could work to restore public trust by halting what he described as "frivolous" litigation within the cryptocurrency industry. Armstrong made these remarks in a post on X dated October 28.

"The next SEC chair should withdraw all frivolous cases, and issue an apology to the American people," said Armstrong. "It would not undue the damage done to the country, but it would start the process of restoring trust in the SEC as an institution."

According to a report from Social Capital Markets, fines imposed by the SEC on the crypto industry surged dramatically from $150.26 million in 2023 to $4.68 billion in 2024, marking an increase of 3018%, as previously reported by Federal Newswire. Despite this rise in penalties, participants within the industry have expressed concerns over a perceived lack of regulatory clarity. SEC Commissioner Mark Uyeda commented, "I think our policies and our approach over the last several years have been just really a disaster for the whole industry." He further said, "We need to lay out some clear guidance and interpretations of what exactly falls within and outside of the securities laws."

Armstrong included a chart labeled "Examples Of The SEC's Conflicting Statements" in his post | X/brian_armstrong

Roslyn Layton, a senior fellow at the National Security Institute, has criticized the SEC's actions against crypto companies as being non-fraud enforcement actions without providing clear regulatory guidelines. Layton said, "There are no forms, no instructions and no published rules for registration." She added that the penalties sought by the SEC are so substantial that many companies cannot afford to contest them, but those who do have highlighted issues with what she describes as bad faith on the part of the SEC.

The SEC has filed lawsuits against several crypto companies, including Coinbase, alleging unregistered securities sales. Other companies facing similar allegations include Binance, Genesis, Gemini, Kraken, Beaxy, and Bittrex.

Before co-founding Coinbase, Armstrong served as a technical product manager at Airbnb.