The Securities and Exchange Commission (SEC) had requested Coinbase (COIN.O) to suspend trading in all cryptocurrencies except bitcoin before suing the cryptocurrency platform in June, according to CEO Brian Armstrong, as reported by the Financial Times on Monday.
“We really didn’t have a choice at that point. Delisting every asset other than bitcoin, which by the way is not what the law says, would have essentially meant the end of the crypto industry in the U.S.,” Armstrong told the FT.
“It kind of made it an easy choice … let’s go to court and find out what the court says,” he added.
Coinbase was accused of operating unlawfully by the SEC because it neglected to register as an exchange. It further claimed that Coinbase traded at least 13 crypto assets that should have been registered as securities, including tokens such as Solana, Cardano, and Polygon.
According to the Financial Times, the SEC’s enforcement division did not issue formal demands for “companies to delist crypto assets.”
“In the course of an investigation, the staff may share its own view as to what conduct may raise questions for the commission under the securities laws,” FT said, citing the SEC.
In reaction to the FT report, a Coinbase representative stated that the SEC has never stated that all assets other than bitcoin are securities, and that staff does not issue formal requests like the one mentioned in the article without a vote of the whole commission.
“We continue our discussions with the Commission, but believe that transparent and fair rulemaking and Congressional action represent the best path forward for American crypto users and the companies building the cryptoeconomy in the US,” the spokesperson added.
The SEC sued Binance in June, as part of SEC Chair Gary Gensler’s attempt to exert control over the cryptocurrency business.
According to Gensler, the crypto business is a “Wild West” that has eroded investor faith in US financial markets. Crypto firms claim that the SEC’s guidelines are ambiguous and that the government is overreaching by attempting to regulate them.
The SEC did not immediately reply to a request for comment on the article from Reuters.
Juby Babu in Bengaluru contributed reporting, as did Kanjyik Ghosh and Rishabh Jaiswal; editing by Sonia Cheema, Savio D’Souza, and Anil D’Silva.
