Brian Armstrong, the CEO of Coinbase has disclosed that the U.S. Securities and Exchange Commission (SEC) once demanded the temporary suspension of trading for all cryptocurrencies, except for Bitcoin (BTC), according to Finance Times. The news comes in the wake of the SEC’s lawsuit against Coinbase on June 6, 2023, accusing the exchange of listing cryptocurrencies that the SEC considers securities without proper registration. Prior to filing the lawsuit, Brian Armstrong claims that the SEC had strongly suggested that Coinbase delist over 200 cryptocurrencies supported by the platform, with the exception of Bitcoin.
SEC asked Coinbase to halt trading in everything except bitcoin, CEO says https://t.co/UHF5vBHWzZ
— Finance News (@ftfinancenews) July 31, 2023
This move appears to align with the long-standing stance of the SEC’s Chairman, who has stated that “only Bitcoin is not a security,” implying that all other cryptocurrencies should be considered securities. The SEC reportedly conveyed to Coinbase:
“We believe that all assets other than Bitcoin are securities.”
When Coinbase inquired about the criteria used to evaluate such a classification, the SEC offered no explanation and merely stated:
“We don’t need to explain to you. Your task is to delist all assets except Bitcoin.”
Undeterred by the SEC’s stance, Coinbase firmly refused to comply, standing its ground and refusing to “compromise” with the regulatory body. Brian Armstrong declared:
“Delisting all assets except Bitcoin without proper legal basis would essentially end the cryptocurrency industry in the United States. Following the SEC’s demands might be an easy option, but Coinbase will not take that path. Let the court decide.”
Indeed, if Coinbase were to succumb to the pressure and halt trading for all altcoins, it would be tantamount to accepting the SEC’s “argument.” The consequence would likely see a domino effect, with the majority of other U.S.-based crypto companies facing similar requirements to delist if they wished to become “legitimate” entities in the eyes of the SEC.
Coinbase is not alone in facing scrutiny from the SEC. Other prominent companies in the crypto space, including Binance, Binance US, CZ, Celsius Network, and their respective CEOs, find themselves in the crosshairs of the regulatory body.
The standoff between Coinbase and the SEC highlights the ongoing struggle between the cryptocurrency industry and regulatory authorities. While some level of regulation is necessary to protect investors and maintain market integrity, the issue lies in finding a balanced approach that fosters innovation and growth in the sector without stifling it entirely.
The outcome of the Coinbase-SEC legal battle will undoubtedly have far-reaching implications for the U.S. cryptocurrency industry. Depending on the court’s ruling, it could either pave the way for a more harmonious relationship between regulators and crypto companies or ignite further tensions and uncertainty in the market.
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