The Financial Times recently published a report in which they cited Brian Armstrong, the chief executive of the Coinbase crypto exchange.
According to the CEO, before the US Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase last month, the regulator had requested the exchange to delist all cryptocurrencies except Bitcoin.
The CEO revealed that SEC had contacted them and said that they consider every token except Bitcoin as a security.
He said that they had asked the SEC to explain how they had come to that particular conclusion because that was not what the law said.
The securities regulator had refused to give an explanation and had just asked the exchange to stop trading in all assets with the exception of Bitcoin.
A spokesperson for Coinbase said that the interview did not mention critical context about the conversations that the exchange had had with the SEC.
Furthermore, the SEC itself had also admitted that the views that were shared in the article were held by some of the SEC’s staff at that time but did not represent the entire Commission.
The SEC had filed a lawsuit against Coinbase back in June in which it was accused of illegal operation and not registering as an exchange.
The regulator also claimed that there were at least 13 crypto assets offered via the exchange’s staking service that were securities.
These included The Sandbox (SAND), Polygon (MATIC), Cardano (ADA), and Solana (SOL). In the same month, the SEC also filed a lawsuit against the world’s largest crypto exchange, Binance.
The allegations against Binance included an offer of unregistered securities and allowing investors in the US to access Binance.com, which is the exchange’s global website.
It was further alleged by the agency that the exchange and its CEO, Changpeng Zhao, had commingled customer funds.
Armstrong stated that if Coinbase had complied with the SEC’s request, then the regulator would have cracked down against most of the American businesses that are operating on the same model.
The CEO stated that they did not wish to set such a precedent, so they were left with no choice. Had they delisted every asset other than Bitcoin, then the entire crypto industry in the US would have been wiped out.
Therefore, they had opted to go to court instead because the law does not say what the SEC was claiming.
According to the regulator, no formal requests had been made by its enforcement division to delist crypto assets.
The representative from Coinbase also stated that the SEC and the exchange were still in discussions about the matter.
They said that fair and transparent rulemaking, along with Congressional action, is the best solution for American crypto companies and users.
Gary Gensler, the chairman of the SEC, has also suggested previously that all cryptocurrencies are securities, with Bitcoin being the only exception.
He has also stated that enforcement action has been taken in the crypto industry due to the lack of investor protection available.