SEC Reportedly Pressures Coinbase to Delist All Cryptocurrencies Except Bitcoin, CEO Reveals

Brian Armstrong, CEO of cryptocurrency exchange Coinbase, recently revealed that the U.S. Securities and Exchange Commission (SEC) once demanded the delisting of nearly 250 tokens on its platform, with the exception of Bitcoin. The revelation came during a July 31 interview with the Financial Times, where Armstrong shed light on the SEC’s stance prior to its lawsuit against the exchange.

According to Armstrong, the SEC held the belief that “every asset other than Bitcoin is a security.” However, Coinbase disagreed with this interpretation of the law and sought an explanation. The SEC’s response was direct: “We’re not going to explain it to you; you need to delist every asset other than Bitcoin.”

This perspective aligns with SEC Chair Gary Gensler’s stance, who previously stated that “everything other than Bitcoin” falls under the agency’s purview as a security.

Had Coinbase complied with the SEC’s demand, Armstrong believed it would have established a dangerous precedent and potentially spelled the end of the crypto industry in the United States. Such a restrictive move would have severely limited the scope and diversity of cryptocurrencies available for trading on the platform.

The SEC eventually sued Coinbase in early June, alleging that the exchange operated as an unregistered exchange and listed 13 cryptocurrencies as unregistered securities. This legal action coincided with similar complaints filed against Binance by the regulatory authority.

The SEC clarified that its enforcement division does not formally request companies to delist crypto assets, but its staff may share their views on actions that could potentially violate securities laws.

Regulatory oversight of the crypto industry in the U.S. remains decentralized, with both the Commodity Futures Trading Commission (CFTC) and the SEC taking regulatory actions against players in the space. In response to this regulatory uncertainty, legislation was proposed that would largely grant crypto jurisdiction to the CFTC and clarify the SEC’s role in relation to cryptocurrencies. The legislation successfully passed the House Agricultural Committee on July 27 after previous approval by the House Financial Services Committee.

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