Brian Armstrong, Coinbase CEO revealed recently that the SEC asked the exchange to delist all crypto assets except Bitcoin. The Securities and Exchange Commission made this request before filing a lawsuit against the company for allegedly operating an unregistered crypto exchange.
Armstrong revealed this in a July 31 interview with the Financial Times. According to the CEO, the SEC approached them saying it believe every asset except Bitcoin is a security. However, when the Commission was asked how it arrived at that conclusion, an explanation wasn’t given, instead, the regulators asked Coinbase to “delist every asset other than Bitcoin.”
Recall that in the lawsuit against Coinbase, 13 digital assets including SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO were listed as securities. Also, Coinbase was charged for allegedly not registering with the Commission thus operating as an unregistered broker, national securities exchange, and clearing agency.
Furthermore, in the interview, Armstrong revealed the potential consequences if Coinbase had followed the SEC’s instruction. According to him, it would have sent the wrong message and most American crypto businesses would have been accused of operating outside the law unless they are registered with the SEC.
“We really didn’t [did not] have a choice at that point, delisting every asset other than Bitcoin, which by the way is not what the law says, would have essentially meant the end of the crypto industry in the US. It kind of made it an easy choice… let’s [let us] go to court and find out what the court says,” he said.
Related Reading: Coinbase Adds 8 New Tokens For its German Resident Users
XRP Lawyer, John Deaton reacts
Meanwhile, pro-XRP lawyer John Deaton reacted to the news as he took to his X (Twitter) account to share his opinion. In a thread, he highlighted the significance of the ruling by Judge Analisa Torres in the case between Ripple Labs and the SEC.
He cited a video that he had made over a year ago “Every coin is in danger.” According to him, if the SEC had won the case, its Chair – Gary Gensler, and Elizabeth Warren’s “anti-crypto army” would have come out in full force.
If the SEC had won the case as it had hoped, @GaryGensler and @ewarren’s anti-crypto army would’ve been out in full force. Do you think all Democrats who’ve spoken out since the Torres Decision, including the 6 who voted in favor of the Bill coming out of the @FinancialCmte,…
— John E Deaton (@JohnEDeaton1) July 31, 2023
Other prominent names who reacted to the news include Lawyer Bill Morgan. In his tweet, he argued that Coinbase at the time had already stopped trading XRP on its platform and only relisted it after the Judge Torres ruling.
Paul Grewal, Coinbase’s chief legal officer also pointed out that a Judges’ role is to apply the law as it is and not fill gaps in it. “Judge Torres understood this, and as Lewis Cohen makes clear, the SDNY has understood this for 50-plus years,” Grewal said.