A recent news report revealed that the United State Securities and Exchange Commission had pressured Coinbase Exchange to relish all digital assets from its platform. However, the exchange refused as it supposed the action would spell doom for the crypto industry in the country.
According to the report, Brian Amstrong, the chief executive director of Coinbase exchange, the biggest digital assets platform in America, revealed in a recent interview his firm’s ordeal with the US SEC before it was sued by the same regulator in June.
Brian stated in the interview that before the legal brawl began between the Coinbase exchange and the SEC, the regulator had sent way more than Wells notice to the exchange.
He added that SEC requested Coinbase to temporarily stop offering trading in all digital assets except Bitcoin, just before it accused it of providing trading in unregistered securities.
Furthermore, the CEO stated that the regulator informed the exchange that all crypto assets are classified as securities except Bitcoin, which they see as the only asset worthy of being a commodity.
In addition, Armstrong claimed that he confronted the regulators that the laws have different interpretations and requested an explanation on how they arrived at that conclusion of classifying all assets as securities.
Coinbase Compliance May Spell Doom For All Crypto Start-Ups
However, the SEC avoided the challenge and stated that it could not elaborate on the reasons behind its conclusion, according to the report. Furthermore, the regulator was stuck to their gun, saying Coinbase needed to delist all the digital assets from its platform.
Shortly after the confrontation, the US SEC filed a case againtCoinbase Exchange claiming that the firm runs an unregistered securities exchange. Also, in the lawsuit file, the regulator categorized about 13 cryptocurrencies, including NEAR, FLOW, CHZ, ICP, DASH, VGX, NEXO, MATIC, SOL, AXS, FIL, ADA, and SAND, as securities.
Previously, Gary Gensler, the Chairman of SEC, had stated that only Bitcoin could be classified as a commodity and claimed all other crypto assets may be securities.
But Coinbase disagreed with the advice of the regulator. The firm claimed that complying could spell doom for many crypto-based businesses in the United States as it would mean they are operating illegally if they don’t register with the SEC.
Furthermore, Armstrong stated that the exchange was left with no other choice but to fight its course in the law court. Because it believed that if it delisted all other digital assets from its platform, saving Bitcoin, according to the counsel of the SEC, the world of the crypto industry in the US would collapse.
Coinbase Caled For Crypto Regulatory Clarity
Hence, Coinbase considered seeking the opinion of the court as a better approach to the issue. However, the SEC claimed that it is not in their enforcement protocol to formally urge firms to delist digital assets. Nonetheless, SEC claimed that its staff has free will to share their view with the public without any link with the agency.
Meanwhile, When the SEC sent a Wells notice to Coimbase in March, the exchange stated that it was well convinced of the legality of its digital assets and operations. Furthermore, the exchange also challenged the regulator for using what it considered an unreasonable and unfair method of dealing with crypto assets.
In addition, the exchange filed a motion to dismiss the SEC’s charges against it, claiming that the regulator does not have the authority to seek civil claims as the crypto assets listed on its platform are not investment contracts or securities.
Furthermore, Coinbase exchange has reported opened a lawsuit against the SEC. In the case, the exchange motioned the court to compel the SEC to create regulatory clarity for the crypto industry.
Before suing Coinbase, the American SEC had allegedly filed a court case against Binance exchange, charging it for operating illegal sales and offers of securities coupled with other charges. Certainly, it was not reported whether the regulator also advised Binance.US to temporarily halt trading in all other digital assets except BTC.