Published , by Asif Khan
Published , by Asif Khan
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.