Crypto exchange Coinbase was once told by the United State securities regulator to delist all cryptocurrencies on its platform except for Bitcoin (BTC), according to CEO Brian Armstrong.
In a July 31 interview with the Financial Times, Armstrong revealed that the U.S. Securities and Exchange Commission wanted the exchange to delist the nearly 250 tokens on its platform prior to it filing a lawsuit against the exchange.
At the time, the SEC reportedly said it believes “every asset other than Bitcoin is a security,” said Armstrong.
“We said, well how are you coming to that conclusion? Because that’s not our interpretation of the law,” Armstrong added.
He recounted that the regulator said “we’re not going to explain it to you, you need to delist every asset other than Bitcoin.”
It’s a similar view held by SEC chair Gary Gensler who claimed in a February New York Magazine interview that “everything other than Bitcoin” is a security under the agency’s remit.
There’s nothing about the crypto securities markets that suggests that investors & issuers are less deserving of the protections of our securities laws.
Congress could have said in the 1930s that the securities laws applied only to stocks & bonds.
For more, read my remarks:
— Gary Gensler (@GaryGensler) June 12, 2023
Armstrong claimed agreeing to the SEC’s request could’ve set a precedent and “would have essentially meant the end of the crypto industry” in the United States.
“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 early June alleging it operated as an unregistered exchange and named 13 cryptocurrencies it said Coinbase offered as unregistered securities. Days earlier, the regulator filed a similar complaint against Binance.
Related: Pro-XRP lawyer claims SEC prioritizes corporate capitalism over investors
The SEC told the Financial Times its enforcement division does not make formal requests for “companies to delist crypto assets” but that its staff may share its view on what actions could violate securities laws.
Crypto industry oversight in the U.S. hasn’t landed on any one regulator and the Commodity Futures Trading Commission (CFTC) and the SEC have both taken regulatory action against crypto industry players.
Legislation that would mostly hand crypto jurisdiction to the CFTC and clarify the SEC’s crypto-related role passed the House Agricultural Committee on July 27 after its earlier passage through the House Financial Services Committee.
Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?