Coinbase has reportedly been ordered by the US Securities and Exchange Commission (SEC) to halt all non-Bitcoin (BTC) trading before the regulator filed charges against it.
The exchange’s CEO, Brian Armstrong, told The Financial Times that Coinbase had been warned by the SEC to halt all crypto trading except Bitcoin without further explanation.
“[The SEC] got back to us and they said…we believe every asset except Bitcoin is a security. And, we said, how do you come to that conclusion, because that is not our interpretation of the law. And they said, we’re not going to explain it to you, you have to remove all assets except Bitcoin.
Armstrong says the SEC’s tough stance forced Coinbase to challenge the lawsuit in court.
“We really had no choice at the time, delisting all assets except Bitcoin, which is not what the law says by the way, would have essentially ended the crypto industry in the US. It made it an easy choice…let’s go to court and see what the court says.
Court documents from earlier this month revealed that the SEC believes Coinbase was aware it may have violated securities laws before the regulator’s lawsuit against the crypto exchange.
The SEC said in its lawsuit,
“And since Coinbase became a publicly traded company, Coinbase has repeatedly informed its shareholders of the risk that the crypto assets traded on its platform could be considered securities and that its conduct could therefore violate federal securities laws. — including in the registration statement it now points to as evidence that the SEC allegedly blessed its conduct.
These actions clearly show that Coinbase understood that the securities laws may apply to its conduct and knew what rules to consider when evaluating the legality of its conduct, yet made the calculated decision to take this risk in the name of growth of her company.
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