Brian Armstrong claims that at one point SEC believed that "every asset other than Bitcoin is a security."
Brian Armstrong, the CEO of the cryptocurrency exchange Coinbase, revealed that the US Securities and Exchange Commission (SEC) had once urged the firm to delist all cryptocurrencies, except Bitcoin (BTC), on its platform.
The revelation was made public during his interview with the Financial Times on July 31st.
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According to Armstrong, before the SEC initiated a lawsuit against the crypto exchange, it claimed that "every asset other than Bitcoin is a security."
Armstrong noted that when Coinbase questioned this conclusion, citing a different interpretation of the law, the regulator insisted that the firm would delist 250 digital assets, excluding Bitcoin, without any explanation.
The stance of the SEC aligns with that of its Chair, Gary Gensler. In February, Gensler declared in a New York Magazine that everything, excluding Bitcoin, falls under the SEC's jurisdiction as a security.
Armstrong underlined the potential consequences of agreeing to the SEC's request, stating that doing so might have established a precedent leading to the downfall of the US crypto industry. Therefore, the Coinbase CEO decided to take the matter to court, saying:
It kind of made it an easy choice <...> Let’s go to court and find out what the court says.
In June, the SEC filed a lawsuit against Coinbase, accusing it of functioning as an unregistered exchange and indicating 13 cryptocurrencies that it believed were unregistered securities. A similar complaint against Binance had been submitted by the regulator just days before.
The SEC clarified to the Financial Times that its enforcement division does not issue formal requests for companies to delist crypto assets, but staff may share their views on potential violations of securities laws.
Presently, the regulatory oversight of the crypto industry in the US is yet to be assigned to a single regulator. The Commodity Futures Trading Commission and the SEC have taken regulatory action against the crypto industry participants.
However, this may soon change as on July 27th, a bill assigning crypto jurisdiction to the CFTC and defining the role of the SEC passed the House Agricultural Committee, following its earlier approval by the House Financial Services Committee.
