Coinbase CEO Brian Armstrong has stated that his company's legal fight with the Securities and Exchange Commission (SEC) is crucial for the future of the U.S. cryptocurrency industry. According to Armstrong, the regulator recommended that the crypto exchange delist all tokens other than bitcoin, a move that would have had devastating consequences for the industry.
In an interview with the Financial Times, Armstrong revealed that the SEC made this request before suing Coinbase for operating as an unregistered securities exchange, broker, and clearing agency. The SEC claims that 13 tokens listed on Coinbase are being sold illegally as unregistered securities.
Armstrong explained that the SEC's recommendation to delist all tokens other than bitcoin would essentially mean the end of the crypto industry in the U.S. He emphasized that this interpretation of the law goes against Coinbase's understanding and would have been ruinous for the industry as a whole.
To defend their position, Coinbase has chosen to go to court and await the court's decision on the matter. They argue that bitcoin should be treated differently from other tokens and should not be classified as a security.
This legal battle between Coinbase and the SEC is just one aspect of a broader conflict unfolding within the digital asset industry. Other entities, including Binance and Ripple Labs, are also engaged in legal disputes with the SEC that will shape how existing securities laws apply to the nascent industry.
In addition to these legal battles, Congress is beginning to take an interest in regulating the crypto market. The House Financial Services Committee recently approved two significant bills related to stablecoins and the crypto market structure. However, the likelihood of these measures becoming law remains uncertain.