Topline
Coinbase CEO Brian Armstrong claimed that the Securities and Exchange Commission asked the crypto exchange to stop trading all cryptocurrencies except Bitcoin, before launching sweeping legal action against the company last month, the Financial Times reported Monday.
The SEC filed a lawsuit against Coinbase last month for operating as an unregistered securities … [+] exchange and broker.
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Key Facts
In an interview with the Financial Times, Armstrong said the SEC told Coinbase that it views “every asset other than bitcoin” as a security and ordered the company to delist them from its website.
Armstrong claims the regulator refused to explain how it arrived at this conclusion.
Aside from Bitcoin, Coinbase lists 261 other tokens on its website as “tradeable” assets.
The Coinbase CEO said his company was left with no choice but to allow the matter to go to court, as compliance with the order would have meant “the end of the crypto industry in the US.”
The SEC told the Financial Times it did not make any “formal requests” for “companies to delist crypto assets.”
Crucial Quote
In a statement shared with Forbes, Coinbase said FT’s interview “ omits important context regarding our conversations with the SEC.” Reiterating the regulator’s comments on the matter, the exchange said: “Prior to litigation, the SEC did not at any point request that Coinbase delist any specific assets.”
Key Background
Last month, the SEC filed a lawsuit against Coinbase, accusing the company of operating as an unregistered securities exchange and broker. In its suit, the regulator accused Coinbase of unlawfully making “billions of dollars” of profit while acting as an unregistered broker for securities. The crypto industry has clashed with the regulator in the past year over its efforts to classify most cryptocurrencies other than bitcoin as securities—a position outlined by the SEC’s Chair Gary Gensler. In response to the SEC’s suit, Coinbase Chief Legal Officer Paul Grewal said the SEC’s actions against the crypto industry were “hurting America’s economic competitiveness and companies like Coinbase that have a demonstrated commitment to compliance.”
Tangent
In its lawsuit, the SEC names thirteen different tokens, including Solana, Cardano, Polygon and others as examples of crypto assets on Coinbase “that are being offered and sold as investment contracts, and thus as securities.” The agency notes that the tokens mentioned are only examples and the list of such “Crypto Asset Securities” being traded on Coinbase is not limited to these thirteen.
Surprising Fact
Coinbase’s trading volume in the past 24 hours, stood at approximately $660,000—the second highest among all crypto exchanges in the world—according to CoinMarketCap.
Further Reading
SEC asked Coinbase to halt trading in everything except bitcoin, CEO says (Financial Times)
SEC Charges Coinbase—Alleges Crypto Trading Platform Operated As Unregistered Exchange Since 2019 (Forbes)
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