Coinbase CEO Brian Armstrong stated that the US’s top regulator, the Securities and Exchange Commission (SEC), told the exchange to delist all cryptocurrencies on its platform except Bitcoin before it sued it last month, the Financial Times first reported on Monday.
According to the report, the SEC made the recommendation to Coinbase, in what was a show of the regulator’s intentions to assert unregulated authority over crypto establishments in the US.
“They came back to us, and they said… we believe every asset other than bitcoin is a security,” Coinbase CEO said. “And we said, well, how are you coming to that conclusion because that’s not our interpretation of the law. And they said, we’re not going to explain it to you; you need to delist every asset other than bitcoin.”
SEC Left Us No Option: Armstrong
The Coinbase boss stated that the SEC’s recommendation left it with no choice but to head to court. Armstrong noted that accepting such a request would mean crypto firms in the US operating non-congruent of the law unless they subscribed to Wall Street’s top regulator.
“We really didn’t have a choice at that point, delisting every asset other than bitcoin, which by the way is not what the law says, would have essentially meant the end of the crypto industry in the US,” Armstrong said. “It kind of made it an easy choice… let’s go to court and find out what the court says.”
The SEC sued Coinbase in June, accusing it of offering unregistered securities to US residents. The regulator cited 13 listed crypto assets on the exchange’s platform as securities, including MATIC, SOL, and ADA. Long before the lawsuit, the duo had slugged it out a couple of times in court over issues surrounding unclear regulatory guidelines in America.
Leveraging on Unclear Guidelines
The SEC and the Commodity Futures Trading Commission (CFTC) have often leveraged the unclear regulatory guidelines in the US to crack down on crypto firms. Despite Armstrong’s Coinbase pushing for a clear regulation, the US government and regulators are reluctant to set the standards straight.
The SEC Chair, Gary Gensler, once stated that all other cryptocurrencies besides Bitcoin are securities. The list included the second-biggest crypto asset, Ether, which a court in the US for the first time classified as a security.
In the lawsuit involving Binance, the SEC didn’t list Ether among the 12 tokens it classified as securities. Hence, the debate on whether cryptocurrency is a security remains an assumption that US regulators will keep using to their advantage until clarified.
