Coinbase CEO stated that if they had yielded to SEC’s demands, it could have repercussions for crypto firms in the United States.
During a recent interview with the Financial Times, Coinbase CEO Brian Armstrong revealed that the U.S. Securities and Exchange Commission (SEC) instructed them to halt trading for all 200 cryptocurrencies listed on the platform, except for Bitcoin, before filing a lawsuit against the exchange in early June 2023.
According to the CEO of Coinbase, the SEC considers every cryptocurrency except Bitcoin to be a security. Evidently, the federal securities regulator was attempting to assert control over the broader market segment.
In its lawsuit, the US SEC designated as securities the thirteen most lightly traded digital assets on Coinbase. Further, the regulator asserted that offering them to customers would subject the exchange to SEC oversight. Armstrong averred:
“They came back to us, and they said… we believe every asset other than Bitcoin is a security. And, we said, well how are you coming to the conclusion, because that’s not our interpretation of the law. And they said, we are not going to explain it to you, you need to delist every other asset other than Bitcoin”.
Armstrong added that had Coinbase acquiesced to the SEC’s demands; it could have set a precedent that would have rendered most US crypto enterprises illegal unless they registered with the Commission. The SEC appears to have attempted to exert undue pressure on Coinbase, but the exchange refused to comply.
Coinbase Versus The SEC
The cryptocurrency exchange Coinbase filed a motion to dismiss all SEC charges last month. Even though Coinbase is not registered with the SEC as a broker, the company denies offering any crypto asset securities for trading.
Moreover, Coinbase contests the SEC’s authority over investors and denies the notion that laws or SEC regulations require function separation. Paul Grewal, the Chief Legal Officer, is willing to engage in a dialogue with financial watchdogs and advocates for new legislation and rulemaking in the future.
