Coinbase CEO Brian Armstrong SEC proposed change that could have ended US crypto industry.

Coinbase CEO Brian Armstrong SEC proposed change that could have ended US crypto industry.

The SEC’s Attempt to Control Coinbase Revealed in Financial Times Interview

In a recent interview with the Financial Times, Brian Armstrong, the CEO of cryptocurrency exchange platform Coinbase, shared some intriguing details about his company’s battle with the U.S. Securities and Exchange Commission (SEC). The interview sheds light on the SEC’s attempt to force Coinbase to delist most of the tokens it offers, excluding Bitcoin, in a move that could have crippled the entire crypto industry in the United States.

According to Armstrong, the SEC suggested that Coinbase delist all assets except for Bitcoin, as the agency prepared to sue the exchange for allegedly operating as an unregistered broker. However, complying with this request would have set a dangerous precedent, rendering most American crypto firms illegal unless they registered with the SEC. Faced with this dilemma, Coinbase made the bold decision to reject the SEC’s request and go to court.

Armstrong explained, “Delisting every asset other than Bitcoin, which by the way is not what the law says, would have essentially meant the end of the crypto industry in the U.S. It kind of made it an easy choice… let’s go to court and find out what the court says.” The SEC had claimed that every asset other than Bitcoin was a security, but Coinbase disagreed with this interpretation and demanded an explanation, only to be met with silence from the SEC.

This dispute between Coinbase and the SEC stems from a broader disagreement about how cryptocurrencies should be classified and regulated. SEC Chair Gary Gensler has made it clear that he believes most cryptocurrencies should be classified as securities, except for Bitcoin, which he considers a commodity. This classification determines whether the SEC or the Commodity Futures Trading Commission (CFTC) has regulatory authority over these assets.

In June, the SEC filed a lawsuit against Coinbase, accusing the exchange of failing to register as a broker, national securities exchange, and clearing agency. The SEC also alleged that some of the crypto assets offered on Coinbase, including popular tokens like Solana, Cardano, and Polygon, were unregistered securities. This lawsuit came just months after Coinbase revealed that it had received a Wells notice, indicating that it was under investigation by the SEC.

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The SEC’s legal action against Coinbase is part of a broader crackdown on malpractices in the crypto sector. Last month, the agency also filed a lawsuit against Binance, another major cryptocurrency exchange. Regulators are increasingly taking steps to ensure compliance and protect investors in the volatile crypto market.

Amidst the ongoing legal battles, the crypto industry continues to face challenges. The collapse of the FTX crypto exchange last year dealt a blow to the industry’s reputation, leading to increased regulatory scrutiny. Last year’s widespread market selloff, known as the “Crypto Winter,” wiped out more than $200 billion in a single day, leaving many investors devastated. Some experts even predicted that the downturn could last through 2023 and possibly into 2024.

Bitcoin, the most traded cryptocurrency, has seen a partial recovery from its lowest point, but it is still far from its all-time high. With a current price of just over $29,000, it has a long way to go to reach its peak of nearly $69,000.

The clash between Coinbase and the SEC highlights the challenges and regulatory uncertainties surrounding the crypto industry. It also raises important questions about the classification and oversight of cryptocurrencies. As this battle continues in the courts, the outcome will have significant implications for the future of the industry in the United States and beyond.

N.B. The original article did not have any lists or tables to incorporate into the revised article. Additionally, the original article did not have any specific humorous or emotional language to incorporate.