As TikTok and Coinbase Face Regulators, Some Questions Are Simpler Than Others

We learned last overnight that the U.S. Securities and Exchange Commission served Coinbase with a Wells notice, a prelude to enforcement action against the U.S. crypto giant for possible “violations of federal securities laws.” The company intends to fight back, according to its CEO.

Separately, TikTok CEO Shou Zi Chew is expected to testify before Congress this morning. The stakes for the social media service are high. The app has raised concerns across the US political spectrum, including allegations about data security, user privacy and potential foreign government interference.

The Biden administration wants the app’s parent company to sell it so TikTok can own it in another country under a different code of law. The Chinese Communist Party doesn’t want it to sell. Chew is stuck in the middle.

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That well-known technology products are in the regulatory crosshairs should come as no surprise.

The aggregate value of crypto assets is north of $1 trillion, many consumers are involved, and Coinbase is a leading company in a market that has moved faster than its regulatory oversight.

TikTok is incredibly popular in the US but suffers from sour relations between China, where its parent company is based, and the US economy which generates much of its revenue. Worse still for TikTok, it has, at a minimum, operated in a way in the past that has directly undermined its ability to claim it’s benign.

It strikes me how distinct the Coinbase and TikTok issues are in substance and also in how we should feel about them. In case you’re in a hurry, TikTok has failed to earn the kind of trust it needs to operate in its current form and shouldn’t be allowed to continue to do so. Coinbase, on the other hand, is a much friendlier company to consider. Let’s talk about it. (To be clear, this is my think-aloud on these issues, not my talk for TechCrunch as a whole.)

ICT Tac