SEC Urged Coinbase to Halt Trading on Non-Bitcoin Cryptocurrencies Before Lawsuit, CEO Reveals
According to Coinbase’s CEO, Brian Armstrong, the Securities and Exchange Commission (SEC) instructed the company to cease trading on all cryptocurrencies except bitcoin prior to filing a lawsuit in June, as reported by the Financial Times.
Armstrong stated that complying with the SEC’s request was not feasible and would have effectively spelled the end of the crypto industry in the United States. “We really didn’t have a choice at that point,” Armstrong told the FT in an interview published Monday.
In response, an SEC spokesperson clarified that their staff does not mandate delisting crypto assets but may outline concerns during investigations regarding potential securities law violations.
While not disputing Armstrong’s account, a Coinbase spokesperson noted that the FT article lacked essential context concerning their discussions with the SEC. They emphasized ongoing dialogues with the Commission and advocated for transparent regulatory frameworks and legislative action to support the American crypto community.
The SEC’s legal actions against Coinbase and Binance in early June marked a significant escalation in regulatory oversight over the crypto industry, previously operating in a regulatory gray area. Armstrong recounted Coinbase’s efforts to seek clarity from the SEC on the classification of digital assets other than bitcoin as securities, which reportedly went unanswered by the regulator.
The lawsuits against Coinbase and Binance are expected to stimulate legal debates and potentially prompt Congressional intervention on cryptocurrency regulations. Despite these challenges, Coinbase’s stock saw a 4% increase early Monday, reflecting ongoing investor interest amid regulatory uncertainties.
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