Brian Armstrong, CEO at cryptocurrency exchange Coinbase , revealed during a Financial Times interview on July 31, that the U.S. Securities and Exchange Commission wanted the company delist nearly all cryptocurrencies and leave only Bitcoin.
We asked, ‘How did you come to this conclusion? That’s not how we interpret the law.’ They said they wouldn’t explain to you what was going on, but you should delist all assets except bitcoin.
Armstrong stated that the SEC considers every asset, other than Bitcoin, to be a security. This view is in line with the statements made by SEC chair Gary Gensler earlier this year. Armstrong, like the rest of industry, was confused by the regulator’s position. He recalled that the regulator refused to explain its reasons.
The SEC put pressure on Coinbase before it sued the exchange at the beginning of June. The Commission accused Coinbase as operating as an unregistered cryptocurrency exchange, and listed 13 cryptocurrencies that it considered unregistered securities. The SEC also made a similar complaint to Binance, before sued the exchange and its CEO Changpeng Zhao.
Armstrong believes that complying with SEC’s requests would have been detrimental for the crypto industry of the U.S. He chose to take the matter to court instead.
We had no choice. Delisting all assets except bitcoin, which isn’t what the law says would have meant the end of crypto in the US […]. It was a simple decision. . . Let’s go to the court and see what it says.
The SEC told the Financial Times later that its enforcement division did not ask companies to remove crypto assets from their exchanges. Gensler stated in a tweet posted in late June that could share its opinions on actions which ‘risk undermining the 90 years of securities laws’.
There is no reason to treat crypto markets differently from the securities markets, just because they use a different technology.
When it comes to regulation, the regulatory landscape for cryptocurrencies remains complex in the U.S. Both the Commodity Futures Trading Commission and the SEC have taken actions against industry leaders. This has added to the regulatory uncertainty. Recent legislation appears to be shifting towards granting jurisdiction to the CFTC.