TL;DR
The Securities and Exchange Commission (SEC) has instructed the exchange to stop all digital assets trading apart from Bitcoin.
This is just one of the many steps the SEC has taken against the exchange lately, including a lawsuit for allegedly operating as an unregistered broker.
250 Tokens Delisting Ordered
The surprise order from the SEC comes before it takes Coinbase to court over alleged violations of securities laws.
Coinbase CEO Brian Armstrong revealed the shocking news. According to him, the SEC has demanded that all tokens apart from Bitcoin be immediately delisted and trading stopped.
The Coinbase CEO also said that the exchange asked how the SEC came to that conclusion. Their only reply was, “We’re not going to explain it to you; you need to delist every asset other than Bitcoin.”
Current Chair Gary Gensler also said the same thing back in February 2023 on cryptos being securities. SEC has effectively ordered Coinbase to stop trading nearly 250 assets on its platform. The SEC considers only Bitcoin as not a security.
Coinbase and SEC: No Love Lost
The spat between Coinbase and SEC is not the first and probably will not be the last. The two have a history.
The former Product Manager of Coinbase (Ishan Wahi) faced charges along with his brother and a friend for insider trading.
But the latest accusations and lawsuits lead to one very strict view of the SEC. It has been on a spree to shut down or stop crypto trading platforms. SEC has cited things such as operating without a proper license or offering unregistered securities to the public.
Coinbase received a Wells notice in March 2023. It was a formal declaration of the regulatory body to open up an investigation into its staking products. In June, the SEC officially sued Coinbase for being an unregistered broker for 13 different assets. The SEC has decided 13 were insufficient and is pushing to enforce a blanket ban.
The next few weeks and months are becoming crucial for the crypto industry in the United States. The SEC is enforcing its interpretation of laws. It has already lost a preliminary case against XRP and has another set of lawsuits against Binance.US).
Many see the latest XRP’s win over the SEC as a sign that the courts are still impartial and giving the industry the proper legal protection it needs. Recently, some bills protecting the industry and individuals have passed Congress, such as the Keep Your Coins Act 2023.
