SEC Told Coinbase To Halt All Cryptos Except Bitcoin Before Lawsuit: FT
Coinbase was instructed by the SEC to halt trading in all cryptocurrencies except for bitcoin before the SEC filed its lawsuit against the company.
Because Bitcoin
July 31, 2023
CoinDesk reported that Coinbase CEO Brian Armstrong revealed that the U.S. Securities and Exchange Commission (SEC) asked Coinbase to halt trading in all cryptocurrencies except Bitcoin prior to taking legal action against the crypto exchange. This request was made on the grounds that the SEC considered all assets other than bitcoin to be securities. The information stems from a Financial Times report.
The SEC's legal action against Coinbase, which took place on June 6, accused the company of violating federal securities law by operating as an unregistered broker, exchange, and clearinghouse for 13 different cryptocurrencies (excluding bitcoin). Coinbase responded to the SEC's charges, arguing that the action taken by the SEC infringed upon due process and was an abuse of discretion. Consequently, Coinbase and the SEC are currently engaged in a legal process.
Brian Armstrong stated that the SEC's recommendation left them with no choice but to resort to litigation. The SEC, however, clarified that its enforcement division did not formally request companies to delist crypto assets.
It's worth noting that SEC Chair Gary Gensler has previously suggested that all cryptocurrencies, excluding bitcoin, should be considered securities. Armstrong's revelations indicate that the SEC considered even Ether, the second-largest cryptocurrency, to be a security before suing Coinbase. It's important to recognize that the views of Gensler, the four SEC commissioners, and SEC staff may differ and do not necessarily represent the institution's official position unless explicitly stated as such.
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