“The industry is primarily focused on trading crypto commodities today, but a robust market to register and issue crypto securities should also exist in the U.S., and could be a real improvement over how traditional securities are issued.”
Brian Armstrong is the co-founder and CEO of the global cryptocurrency exchange Coinbase and is considered one of the pioneers of the United States cryptocurrency scene. He has led Coinbase to rapid growth, with the company seeing over $200 million in funding from big-shot investors such as Andreessen Horowitz, Union Square Ventures, New York Stock Exchange and Draper Fisher Jurvetson. Coinbase has served over 10 million customers globally. Fortune’s 2017 40 Under 40 list included Armstrong, as did Time magazine’s 100 Next list in 2019.
He holds bachelor’s degrees in computer science and economics and a master’s in computer science from Rice University. He started as a developer for IBM, then moved on to Deloitte to become a consultant. In 2011, he had a stint as a software engineer focusing on fraud prevention at Airbnb.
It was a rough year for Coinbase, which laid off 18% of its staff amid the economic downturn. Armstrong issued a message to his employees in June when companywide staff reductions were announced. Armstrong didn’t seem too optimistic about Coinbase’s revenue come December, especially following rival exchange FTX’s controversial crash. In an interview with Bloomberg, Armstrong articulated how he believed Coinbase’s revenue would fall by 50% or more before the end of 2022.
Armstrong also expressed his thoughts on the FTX debacle, stating that it’s likely to have been a case of massive fraud rather than a simple series of mismanaging accounts, as former FTX CEO Sam Bankman-Fried claimed. “It appears that they took customer funds from their exchange and commingled them or moved them into their hedge fund- and then ended up in a very underwater position,” Armstrong told Bloomberg.
But Armstrong and his company attempted to ride the waves of the crisis, with Armstrong publishing his thoughts on regulatory clarity in cryptocurrency, underscoring the need for “regulatory clarity for centralized actors, and a level playing field across exchanges, while preserving the decentralized crypto innovations.” The company also seemed to double down on increasing public trust and highlighting transparency with the release of “Coin: A Founder’s Story” in December and a detailed look-back on Coinbase’s global 2022 operations on the Coinbase blog.
Late in the year, in a move that was lauded by the cryptocurrency community, Armstrong backed privacy-preserving protocol Tornado Cash in a lawsuit against the U.S. Treasury after the agency sanctioned the decentralized software following accusations of being used by North Korea to launder funds. Armstrong clarified that while he supported the Treasury “sanctioning bad actors” in the community, its actions threatened the community’s access to financial privacy.
Despite 2022’s setbacks, Armstrong seems relatively optimistic about the cryptocurrency industry. In late December, he stated that the crypto industry “basically has a black eye” owing to the number of scammers and fraudsters over the years. He still thinks that the FTX crisis isn’t representative of the entire industry and that crypto isn’t going anywhere.
Armstrong has also been tweeting about crypto regulation and Coinbase’s plans regarding Web3. Coinbase will seemingly increase transparency through 2023 and explore new ways to offer cryptographic financials, with Coinbase laying out a “long-term crypto strategy and investment in Web3.” The focus on Web3 seems to be concentrated on building solutions such as self-custody wallets, nonfungible tokens, developer tools and other technological advancements.
Coinbase’s stock lost a considerable amount of value when news broke out of the FTX crash in 2022. However, Coinbase climbed 11.61% following JPMorgan’s neutral rating of the stock, highlighting it as a possible “beneficiary of the challenges that have faced other brokers/exchanges in the aftermath of the collapse and bankruptcy of FTX.”
