According to a report in the Financial Times, the US Securities and Exchange Commission (SEC) requested that Coinbase halt all trading of cryptocurrencies other than Bitcoin.
Stay up-to-date with the latest cryptocurrency market trends and blockchain news and information by following CFTime page now.
Coinbase CEO Brian Armstrong revealed that he refused the SEC's suggestion in order to protect the cryptocurrency industry.
The suggestion was made by the SEC prior to its lawsuit against Coinbase last month. It called for Coinbase to delist over 200 cryptocurrencies on its platform and only trade Bitcoin. The SEC claims that Coinbase engaged in securities exchange, brokerage, and clearinghouse activities without registering.
The reason for the SEC's request to delist cryptocurrencies is that it considers every cryptocurrency other than Bitcoin to be a security. The SEC refused to provide legislative clarity for the tokens it offers on its trading platform and demanded that the exchange delist all tokens except Bitcoin.
Armstrong stated that following the SEC's suggestion to delist every cryptocurrency on the exchange was not an option for his company. In order to protect the US cryptocurrency industry, he chose to pursue legal action for relief.
It is worth noting that several years ago, former SEC Chairman Gary Gensler spoke at a Bloomberg-organized conference for institutional investors, stating that "three-quarters of this (cryptocurrency) market might be securities."
If Coinbase were to agree with the SEC's suggestion, it would set a precedent that would allow most US cryptocurrency businesses to operate without registering with the committee. Therefore, Coinbase's CEO rejected the SEC's suggestion, believing that it would cause serious harm to the US cryptocurrency industry.
In its statement, the SEC clarified that its enforcement division did not formally ask Coinbase to delist cryptocurrency tokens. The SEC added, "During the investigation process, staff may share their views on what conduct might raise questions under the securities laws."
The SEC's action has raised concerns and sparked discussions about the future development of the cryptocurrency industry. While cryptocurrencies are volatile in value, many supporters believe they will become the currency and savings method of the future.
However, cryptocurrencies also face challenges such as energy consumption, legal issues, and regulation. These issues need to be addressed in order for the cryptocurrency industry to continue to grow. The SEC's action also serves as a reminder to cryptocurrency businesses and investors that regulatory agencies may impose stricter regulations and legal enforcement.
