It has recently come to the knowledge of the public that the United States Securities and Exchange Commission (SEC) advised Coinbase, the largest US-based crypto exchange, to halt trading in all crypto in the country except Bitcoin (BTC) before suing the exchange last month for allegedly failing to register as a broker.
According to Coinbase CEO Brian Armstrong, the securities regulator also instructed the exchange to delist the over 200 tokens it offers on its trading platform, including Shiba Inu (SHIB), Cardano (ADA), and Solana (SOL), among others.
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In a conversation with Financial Times, Armstrong said, “The SEC made the recommendation before launching legal action against the Nasdaq-listed company last month for failing to register as a broker.”
Recall that on June 6, the SEC filed a lawsuit against Coinbase for allegedly breaching federal securities law by simultaneously operating as a broker, an exchange, and a clearinghouse for unregistered securities.
According to FT, Coinbase CEO said, “They came back to us, and they said. . . we believe every asset other than bitcoin is a security. 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.”
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Armstrong revealed that the instruction from the SEC left the crypto exchange with no choice but to head to court to seek interpretation of the laws that guide securities in the United States.
The SEC, on the other hand, told FT that its enforcement division did not formally request companies to delist crypto assets, stating that during investigations, the staff may share its own view as to what conduct may raise questions for the commission under securities laws.
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