In an extraordinary revelation, Brian Armstrong, the CEO of leading crypto exchange Coinbase, claimed that the United States Securities and Exchange Commission (SEC) once urged the company to delist all cryptocurrencies except Bitcoin.
This disclosure came during Armstrong's interview with the Financial Times on July 31st, adding a new twist to the increasingly contentious relationship between regulators and the crypto world.
Regulatory Challenges: Every Crypto, but Bitcoin?
According to Armstrong, the SEC insisted that Coinbase remove nearly 250 different tokens from its platform, just before the regulatory body filed a lawsuit against the exchange.
Reportedly, the SEC put forth the argument that "every asset other than Bitcoin is a security." However, this left Armstrong and his team perplexed, prompting them to question the basis for such a claim. Armstrong reflected on the interaction with the regulator, saying, "We said, well how are you coming to that conclusion? Because that’s not our interpretation of the law." But the regulator's reply was firm, offering no explanation: “We’re not going to explain it to you; you need to delist every asset other than Bitcoin”.
SEC's Legal Showdown with Crypto Exchanges
In early June, the SEC launched legal proceedings against Coinbase, alleging that it was functioning as an unregistered exchange and had offered 13 cryptocurrencies that the SEC categorized as unregistered securities.
This lawsuit followed a similar complaint against another giant in the crypto exchange world, Binance. “They came back to us, and they said we believe every asset other than bitcoin is a security,” Armstrong reiterated.
“And, we said, well how are you coming to that conclusion, because that’s not our interpretation of the law. And they said, we’re not going to explain it to you, you need to delist every asset other than bitcoin”.
This ultimatum left Coinbase with little choice, as Armstrong pointed out. He said, “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 US”.
Ultimately, the crypto giant decided to contest the regulator’s verdict in court, turning a critical juncture into an opportunity to seek judicial clarity. Armstrong concluded, “It kind of made it an easy choice .
. . let’s go to court and find out what the court says”.