SEC Asked Coinbase to Suspend All Cryptos except Bitcoin Before Litigation: Report

SEC Asked Coinbase to Suspend All Cryptos except Bitcoin Before Litigation: Report

Coinbase has revealed that the Securities and Exchange Commission (SEC) had asked it to stop trading in all cryptocurrencies except Bitcoin before suing the crypto exchange. Thus, Coinbase was forced to act by going to court to avert possible damage to the industry.

The information was
shared with the Financial Times by Coinbase’s Chief Executive Officer,
Brian Armstrong. The SEC sued Coinbase in June for allegedly failing to
register as an exchange and listing at least 13 cryptocurrencies that are considered
securities without registering them with the commission.

„We really did not
have a choice at that point because delisting every asset other than Bitcoin,
which is not what the law says, would have essentially meant the end of the
crypto industry in the US,” Armstrong told the FT.

SEC Denies Coinbase’s
Claims

In contrast, the SEC reportedly told the FT that its
enforcement division did not make any formal request to cryptocurrency
exchanges to delist crypto assets. According to the publication, the securities regulator dismissed the claims, saying they could have been the views of
its staff.

In April, Coinbase sued
the SEC, requesting the court to compel the regulator to provide proper guidance for the digital
asset industry. The lawsuit followed a Wells
Notice, a formal warning
that an enforcement action was imminent, issued against the exchange by the SEC
in March.

Additionally, in June,
the SEC sued
Coinbase for allegedly
operating as an exchange, broker, and clearing agency without
registering with the commission. Besides that, the authority accused the
company of failing to register its staking program.

SEC-Crypto Showdown

There has been an
ongoing conflict between the SEC and the cryptocurrency companies operating in
the US. The SEC’s Chair, Gary Gensler, has accused the industry of ignoring the
law. In contrast, the crypto companies are blaming the regulator for not
providing proper guidelines for the industry.

About two weeks ago,
Finance Magnates reported that the SEC and Coinbase had their first
hearing in court. During the
hearing, the exchange dismissed the regulator’s allegations that it was listing
unregistered securities. According to Coinbase, the regulator approved its
application, which included the flagged cryptocurrencies, to go public in
2021.

However,
the SEC argued that granting the exchange the approval to operate as a public company did not mean endorsing its activities. The case is expected to have a
significant impact on the industry and how digital assets could be regulated.

This article was written by Jared Kirui at www.financemagnates.com.

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