Key takeaways:
- According to reports, the SEC’s initial suggestion to Coinbase included delisting over 200 coins in order to establish greater power.
- According to Coinbase CEO Brian Armstrong, the SEC considers all assets, except bitcoin, to be securities.
Coinbase, the renowned cryptocurrency exchange platform, has been at the centre of a storm of controversy after its CEO, Brian Armstrong, disclosed the shocking details of a request made by the U.S. Securities and Exchange Commission (SEC).
According to Armstrong, the regulatory body had sought the removal of all assets from Coinbase’s trading platform except for Bitcoin.
In a recent interview with the Financial Times on July 31, Coinbase CEO Brian Armstrong disclosed that the U.S. Securities and Exchange Commission (SEC) had requested the exchange to remove approximately 250 tokens from its platform before filing a lawsuit against the company.
According to Armstrong, the SEC’s stance was that they considered “every asset other than Bitcoin” to be classified as a security. However, Coinbase disagreed with this interpretation, as it differed from their own understanding of the law.
Coinbase CEO revealed, “They approached us and asserted that they consider every asset, except for Bitcoin, to be a security.” When Coinbase inquired about the basis for this conclusion, the SEC declined to provide an explanation, insisting on the delisting of all assets except Bitcoin.
Armstrong explained that Coinbase has no choice but to file a legal challenge to the SEC’s request. Compliance, according to the chief, would have had serious consequences for the crypto business in the United States.
Coinbase CEO, Brian Armstrong, highlighted that the SEC’s stance aligns with that of SEC Chair Gary Gensler, who asserted in a February New York Magazine interview that “everything other than Bitcoin” falls within the agency’s jurisdiction as a security.
Armstrong emphasized that complying with the SEC’s demand could have established a dangerous precedent and effectively spelled the demise of the cryptocurrency industry in the United States.
Gensler previously recommended that most cryptocurrencies, with the exception of Bitcoin, are securities. However, Ethereum, the second-largest cryptocurrency and a critical component of many industry projects, was noticeably excluded from the SEC’s case against Coinbase. It also did not appear on the SEC’s list of 12 “crypto asset securities” in Binance’s lawsuit.
