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Coinbase CEO Brian Armstrong recently disclosed that the U.S. Securities and Exchange Commission (SEC) had requested the exchange to halt trading for all digital assets except Bitcoin.
The SEC insisted that all assets, apart from Bitcoin, should be treated as securities. Coinbase disagreed with this interpretation of the law, but the SEC did not provide a satisfactory explanation for its stance. They demanded Coinbase to delist all assets other than Bitcoin.
The SEC identified 13 assets (SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO) as securities in the lawsuit. The agency also accused Coinbase of evading registration with the SEC as a broker or national securities exchange, avoiding the disclosure requirements set by Congress.
Armstrong stated that following the SEC’s instructions would have sent the wrong message and would essentially end the crypto industry in the U.S. The situation left Coinbase with no choice but to challenge the SEC in court to seek clarity on the matter.
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Recent developments in the SEC-Ripple case ruled XRP as a non-security, though institutional sales of tokens were deemed to violate federal securities laws. This outcome has been seen as a potential benefit to the ongoing Coinbase lawsuit.