• Coinbase was ordered by the SEC to cease all non-Bitcoin trading before being sued.
• SEC believes Coinbase violated securities laws and had prior knowledge of this risk.
• Coinbase decided to take the case to court instead of delisting every asset other than Bitcoin.
Coinbase Ordered to Halt Trading on All Crypto Assets Except Bitcoin
The U.S. Securities and Exchange Commission (SEC) ordered Coinbase, a leading crypto exchange, to stop all non-Bitcoin (BTC) trading prior to filing charges against it. According to Coinbase’s CEO Brian Armstrong, the SEC gave no explanation for their decision.
Coinbase Forced To Fight Lawsuit in Court
Armstrong stated that delisting every asset other than Bitcoin would have meant “the end of the crypto industry in the US” and forced them to fight the lawsuit in court instead. Court documents from earlier this month revealed that the SEC believes that Coinbase was aware that it was potentially violating securities laws beforehand but took on this risk with hopes of growing its business anyway.
Risk That Crypto Assets Could Be Deemed Securities
Since becoming a public company, Coinbase has made its shareholders aware of the risk that crypto assets traded on its platform could be deemed as securities and therefore violate federal securities laws; even in its own registration statement which it now uses as proof that its conduct is approved by the SEC itself.
SEC’s Hard-Lined Stance
The hard-lined stance taken by the SEC ultimately put pressure on Coinbase, forcing them into a difficult situation where they had no choice but take action against what they believe is an unlawful demand from a regulator who refused to explain why they were making this call .
Court Will Rule On Legality Of Decision
The case will be heard in court where judgement will be passed upon whether or not these actions are legal according to existing legislation. Until then, only time will tell how this story unfolds for both parties involved.