Coinbase CEO backed Treasury’s shift on crypto regulation, urging crime crackdowns that protect innovation

Brian Armstrong, the CEO of crypto exchange Coinbase (Nasdaq: COIN), has endorsed the U.S. Department of the Treasury's decision to reverse sanctions on Tornado Cash

Coinbase CEO Brian Armstrong has thrown his support behind the U.S. Department of the Treasury’s decision to reverse sanctions on Tornado Cash, describing the move as a meaningful step for privacy rights and free speech.

Armstrong, known for his outspoken advocacy on crypto policy, reacted to the government’s filing in Van Loon v. Department of the Treasury on X (formerly Twitter) Thursday morning.

“No one wants to see bad folks use crypto. But privacy is an important feature for many law abiding citizens, and you can’t sanction open source code (it’s a free speech issue),” he said. The Coinbase (NASDAQ:COIN) executive went on to say:

Glad to see this get fixed. We look forward to working with Treasury to find ways to combat the ~0.1% of illicit activity in crypto (far less than cash or the banking system!) in ways that are in line with American laws and values.

Tornado Cash, a decentralized privacy protocol, was blacklisted by Treasury’s Office of Foreign Assets Control (OFAC) last year for allegedly facilitating the laundering of cryptocurrency stolen by North Korean hackers.

In its updated position, Treasury recognized the difficulties in applying financial sanctions to open-source technologies operating without a central point of contact or control. The department highlighted the challenge of targeting financial tools that exist in decentralized digital environments.

While lifting the sanctions, officials reaffirmed their commitment to countering the DPRK’s use of digital assets.

“We remain deeply concerned by the significant state-sponsored hacking and money laundering campaign to steal, gain possession of, and deploy digital assets to support the Democratic People’s Republic of Korea (DPRK) and the Kim regime,” Treasury said.

“Digital assets present enormous opportunities for innovation and value creation for the American people. Securing the digital asset industry from abuse by North Korea and other illicit actors is critical to establishing U.S. leadership and ensuring that the American people can benefit from financial innovation and inclusion,” Treasury Secretary Scott Bessent added.

The legal shift represents a key moment in the ongoing discussion of how to regulate emerging financial technologies without encroaching on constitutional rights.

Armstrong’s remarks also tie into Coinbase’s broader position that open-source software should not be criminalized and that targeted enforcement efforts can be applied to reduce crime. His call to work with Treasury to reduce crime in a way that aligns with U.S. values signals a potential path for industry-government collaboration.