Breaking Down Coinbase’s Ex-SEC Hire as Crypto Regulations Mount 

Cryptocurrency exchange Coinbase announced today that it hired Brett Redfearn, ex-director of SEC’s trading and markets division, to run its capital markets arm. These recent regulatory hires have been nothing new for the crypto space, as governments have continued to enforce stricter regulatory mandates on the industry. Back in February, Binance hired Max Baucus, a long-time member of the U.S. Senate, to guide the exchange through future regulatory matters. 

The Crypto Giant Looks to Gain Regulatory Clarity and Goodwill following $6.5m in fines 

Mr. Redfearn’s hire comes at a time of increased scrutiny and attention from lawmakers. Only weeks ago, Coinbase agreed to pay $6.5 million to the Commodity Futures Trading Commission (CFTC) to settle allegations that the exchange had manipulated trading prices on its GDAX trading platform between 2015 and 2018. GDAX, now known as Coinbase Pro, was accused by the CFTC of “recklessly deliver[ing] false, misleading, or inaccurate reports concerning transactions in digital assets.” 

These regulatory infractions smear the reputation and credibility of the crypto industry at large, giving lawmakers a reason to question whether the space has run amok for far too long. As institutional interest in crypto markets surged, government officials have become wary of these digital assets. In February, the Securities Exchange and Commission released a compliance notice on potentially enforcing securities regulations on cryptocurrencies. 

Coinbase to DPO: Why It Matters in Light of the Recent Regulatory Hire

It’s also important to note that Coinbase is preparing to go public through a direct listing on Nasdaq. The exchange’s S-1 was made public for the first time, showing a net income of $300 million in 2020 — up 1100% from 2019. It’s likely that Coinbase will DPO at valuations upward of $100 billion. As a public company, Coinbase will have to disclose all their financial dealings and exchange operations. With the expertise of the former SEC director, the exchange will look to tread through the currently murky regulatory waters. 

“I appreciated the significant potential in this space if issuers, markets, and market participants could appropriately navigate the regulatory landscape. And that is something I can help make happen,” said Redfearn in a blog post. 

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