Coinbase Urged to Stop All Trading Except on Bitcoin: Crypto business may need to brace themselves for ground-shaking impact of the upcoming SEC ruling
The U.S. Securities and Exchange Commission (SEC) urged Coinbase to suspend trading in all cryptocurrencies except bitcoin before taking legal action against the crypto platform in June, according to CEO Brian Armstrong, as reported by the Financial Times.
Armstrong stated that they felt compelled to head to court as complying with the SEC’s request to delist over 200 tokens, leaving only bitcoin, would have effectively spelled the end of the crypto industry in the United States.
SEC’s Advice May Signal a Future Decision
The SEC accused Coinbase of illegal operations for not registering as an exchange and alleged that the company traded at least 13 crypto assets as unregistered securities, including Solana, Cardano, and Polygon.
The recommendation to halt trading in all cryptocurrencies except bitcoin signifies the SEC’s push for broader regulatory control over the crypto industry under the leadership of Chair Gary Gensler, who has referred to the crypto space as a “Wild West” undermining investor trust in the U.S. capital markets.
The Rule Could Affect the Entire Crypto Industry
This regulatory oversight highlights the ongoing debate regarding the classification of crypto tokens under the SEC’s purview. While the SEC’s stance on most cryptocurrencies, excluding bitcoin, being securities remains unclear. The implications of this move for the rest of the industry are subject to further scrutiny.
The outcome of the legal process between Coinbase and the SEC may have significant ramifications for other crypto businesses in the U.S., which have relied on the assumption that many tokens are not securities.
SEC Chair Gensler’s efforts to assert regulatory authority over the crypto industry extend beyond Coinbase, as the regulator had previously sued Binance in March. The different opinions within the SEC’s ranks underscore the challenges in establishing consistent regulatory standards for the crypto space.
