Before bringing legal action, the SEC requested that Coinbase delist all cryptocurrencies other than bitcoin.
The CEO of cryptocurrency exchange Coinbase, Brian Armstrong, allegedly received instructions from the US securities regulator to delist all digital assets except for bitcoin. Accepting the SEC's request, according to Armstrong, would have "meant the end of the crypto industry in the U.S."
According to reports, the SEC has declined to clarify why it classifies digital assets as securities.
The U.S. Securities and Exchange Commission (SEC) reportedly requested that Coinbase delist all digital assets other from bitcoin before bringing legal action. In an interview with the Financial Times, Brian Armstrong, the founder and CEO of Coinbase, asserted that the U.S. regulator's attitude implied it viewed every other digital currency as a security.
The CEO claims that Coinbase disregarded the regulator's guidance before the SEC sued the company. However, the SEC only listed 13 coins in its case, which was filed on June 6, as assets that satisfy its standards for investment contracts. The regulator charged Coinbase with selling unregistered securities and claimed the cryptocurrency exchange had neglected to file a registration for its staking-as-a-service scheme.
SEC denies requesting businesses to delist cryptocurrency assets.
Armstrong remarked on the SEC's interaction with the cryptocurrency exchange platform right before to the filing of the case, claiming that the regulator even declined to provide an explanation for why it wanted the trading of other assets to be suspended.
They claimed when they got back to us, "We think every asset besides bitcoin is a security. And we asked, "How are you drawing that conclusion?" since that wasn't how we read the statute. The Coinbase CEO remarked, "We're not going to explain it to you; you need to delist every asset except bitcoin.
According to Armstrong, Coinbase decided to file a lawsuit after the SEC issued the demand since complying with the regulator's request would have led to the collapse of the cryptocurrency.
The Financial Times report also claimed that the SEC had denied requesting that "companies delist crypto assets." The authority further asserted that its employees might have given the idea that the SEC considers all digital assets other than bitcoin to be securities, noting:
The staff "may share its own views as to what conduct may raise questions for the commission under the securities laws during an investigation."
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