The U.S. Securities and Exchange Commission representatives recently told Coinbase that they believe that all crypto assets, except Bitcoin, are securities. They made the aforementioned claim prior to suing the exchange in June.
Also Read: SEC Asked Coinbase to Halt Trading of All Cryptos, Except Bitcoin
It was an “easy choice” to go to court: Armstrong
In a recent interview with the Financial Times, Coinbase CEO Brian Armstrong said,
“They [The SEC] came back to us, and they said… we believe every asset other than Bitcoin is a security.”
Coinbase asserted that its interpretation of the law was different. When the exchange questioned the regulatory agency about the basis of its “security” branding, the SEC refused to explain why. They just instructed the company to delist all assets except Bitcoin, according to Armstrong.
The executive added that if Coinbase had followed the instructions, that would have set a wrong example. In such a scenario, most American crypto businesses would have been deemed to be operating outside the law, unless they registered with the commission.
Armstrong added that the company did not have a choice at that point. Delisting every asset other than Bitcoin would have essentially marked the end of the crypto industry in the U.S. because most businesses would have been called out for operating outside the law. Consequentially, going to the court to seek clarity became an “easy choice” for Coinbase, the executive said.
In early June, the SEC sued Coinbase citing regulatory in-compliance. However, before that, Coinbase had filed a lawsuit against the regulatory agency in April seeking regulatory clarity for crypto. In the limited legal action, Coinbase asked a federal court in the U.S. to order the SEC to respond “yes” or “no” to a petition submitted. The exchange posed 50 specific concerns entailing questions regarding how a particular digital asset should be regulated. It also requested the basis of classification. However, with the ruling in the SEC-Ripple case recently, the crypto industry received its much-awaited clarity.
Also Read: Coinbase Sues SEC, Seeking Regulatory Clarity For Crypto