- SEC’s hardline stance: All but Bitcoin are securities, says Coinbase CEO.
- Armstrong challenges SEC’s directive, igniting a legal battle.
- U.S. crypto regulation’s future hangs in the balance amid regulatory tug-of-war.
Coinbase’s CEO, Brian Armstrong, recently revealed that the U.S. Securities and Exchange Commission (SEC) had once instructed his exchange to eliminate all cryptocurrencies, barring Bitcoin. This unexpected revelation, disclosed during a Financial Times interview, has stirred the crypto world.
Armstrong detailed the SEC’s belief that “every asset other than Bitcoin is a security.” He challenged this sweeping classification, asking the regulator to explain its reasoning. The SEC’s response, as per Armstrong, was unequivocal and left no room for negotiation: “we’re not going to explain it to you; you need to delist every asset other than Bitcoin.”
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SEC’s Crypto Controversy and Industry’s Counteraction
This viewpoint aligns with SEC Chair Gary Gensler’s assertion that all cryptocurrencies, barring Bitcoin, fall within the agency’s jurisdiction as securities. Gensler’s tweet underscored the SEC’s dedication to applying the safeguards of conventional securities laws to the crypto sector, stating, “The crypto securities markets do not indicate that investors and issuers are any less worthy of our securities laws’ protections.”
However, Armstrong contended that acceding to the SEC’s request would have set a dangerous precedent, potentially leading to the demise of the U.S. crypto industry. As a result, he chose to contest the SEC’s directive in court. “It kind of made it an easy choice […] Let’s go to court and find out what the court says,” Armstrong declared.
In June, the SEC sued Coinbase, accusing it of operating as an unregistered exchange and offering 13 cryptocurrencies as unregistered securities. This lawsuit followed a similar complaint against Binance, another leading crypto exchange.
The SEC clarified to the Financial Times that its enforcement division does not formally ask companies to delist crypto assets. However, it did admit that its staff might share views on actions that could breach securities laws.
Navigating the Future of U.S. Crypto Regulation
The future trajectory of regulatory supervision over the U.S. crypto industry remains ambiguous. The SEC and the Commodity Futures Trading Commission have intervened, taking measures against crypto players, underscoring the absence of a consolidated, definitive regulatory authority.
However, a ray of hope for more precise regulation may emerge with the recent approval of a bill by the House Agricultural Committee following its initial endorsement by the House Financial Services Committee. This law chiefly assigns the CFTC authority over crypto matters while delineating the SEC’s role in handling crypto-centric issues.
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As the crypto landscape continues to shift and grow, the discourse around its regulation keeps pace. The resolution of this regulatory power struggle has far-reaching implications for the trajectory of cryptocurrencies in the United States and globally.