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SEC asked Coinbase (COIN) to halt all non-Bitcoin crypto trading, CEO tells FT

The SEC is suing Coinbase already, but the CEO says the regulator asked the company to cease trading on over 200 crypto tokens.

Asif Khan

July 30, 2023 10:15 PM

Coinbase

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New details have emerged of the weeks leading up to the Securities and Exchange Commission (SEC) suing Coinbase. The company's CEO Brian Armstrong says the regulator asked Coinbase to cease trading on all non-Bitcoin cryptocurrency tokens. 

In an exclusive interview with the FT, Armstrong said, "They came back to us, and they said . . . we believe every asset other than Bitcoin is a security,” Armstrong continued to the Financial Times. “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.” 

Putting aside the merits of cryptocurrency, the ramifications of Armstrong agreeing to the SEC's request would be felt across all sorts of cryptocurrencies. Cryptocurrency marketplaces are certainly at an inflection point with the SEC able to pick winners. Multiple regulators are attempting to make the claim that many cryptocurrency assets are securities or somehow fall under their jurisdiction.

It's quite amusing to see regulators ask proponents of decentralized finance to stick to only one token as it does seem counterintuitive to whatever the point of this wealth creation and destruction in the rolling crypto bubbles is.

The SEC told the FT that the regulator made no formal request for “companies to delist crypto assets. In the course of an investigation, the staff may share its own view as to what conduct may raise questions for the commission under the securities laws.” Is Coinbase (COIN) CEO Brian Armstrong misremembering a conversation with the regulator? We'll have plenty of lawsuits to pay attention to as the SEC and Coinbase have sued each other.

Most crypto marketplaces were not designed with the assumption that they were to be treated as securities, so it will be interesting to keep up with the legal action between US regulators and companies like FTX, Binance, and Coinbase.

Asif Khan

CEO/EIC/EIEIO

Asif Khan is the CEO, EIC, and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.