Breaking news! This shocking SEC regulation can forever change the world of cryptocurrencies.
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Coinbase's CEO, Brian Armstrong, revealed that the Securities and Exchange Commission (SEC) made a request to halt trading in all cryptocurrencies except for #bitcoin. Armstrong stated that complying with such a request would have resulted in the potential demise of the cryptocurrency industry in the United States.
The US Securities and Exchange Commission (SEC) requested Coinbase, a cryptocurrency exchange, to halt trading in all cryptocurrencies except for bitcoin before initiating legal action against them. This move signals the SEC's intention to expand its regulatory control over a broader segment of the crypto market.
Brian Armstrong, the CEO of #Combase. revealed that the SEC recommended delisting more than 200 tokens offered by the exchange, leaving only bitcoin untouched, claiming that these assets should be treated as securities. However, Coinbase disagreed with this interpretation of the law and asked for an explanation, which the #SEC declined to provide. The SEC insisted on the delisting without further clarification.
Had Coinbase complied with the request, it could have set a precedent where most American crypto businesses would operate outside the law unless they registered with the SEC. Armstrong stressed that the decision to go to court was inevitable, as delisting all assets other than bitcoin, which was not required by the law, would have effectively brought an end to the crypto industry in the US.
Until now, the oversight of the cryptocurrency industry has been unclear, with both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) vying for control.
In March of this year, the CFTC filed a lawsuit against #Binance, the largest crypto exchange, followed by the SEC's legal action three months later. SEC chair Gary Gensler has expressed the belief that most cryptocurrencies, except for bitcoin, should be classified as securities. The recent recommendation to Coinbase indicates that the SEC is adopting this interpretation to regulate the industry.
Notably, the SEC's case against Coinbase did not include ether, the second-largest cryptocurrency, which plays a significant role in various industry projects. Moreover, the SEC stated that its enforcement division did not formally request companies to delist crypto assets,
There is an ongoing debate among US authorities regarding whether all or any crypto tokens should fall under the SEC's jurisdiction. If the SEC gains oversight, it would impose more stringent compliance standards. Many American companies have built business models on the assumption that crypto tokens are not securities, and if told otherwise, they may have to halt operations immediately.
The potential regulation by the SEC could impact the availability of public offerings and retail trading of tokens, necessitating some intervention from Congress. As of now, it remains uncertain how a settlement involving Coinbase delisting all tokens other than bitcoin would affect the rest of the industry. The SEC has declined to comment on this matter.
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