The US Securities and Exchange Commission (SEC) has reportedly demanded Coinbase, one of the leading cryptocurrency exchanges in the US, to suspend trading of all digital assets except Bitcoin, ahead of its legal action against the platform.
This move signifies the regulator’s intent to expand its jurisdiction over a broader scope of the crypto market. SEC Chairman Gary Gensler has been vocal about his belief that most cryptocurrencies, excluding Bitcoin, should be classified as securities.
Nevertheless, Gensler’s stance on Ethereum, the second-largest cryptocurrency, and a variety of altcoins remains unclear.
Coinbase CEO Brian Armstrong revealed in a recent interview with the Financial Times that the SEC had proposed delisting all cryptocurrencies except Bitcoin from the platform before filing a lawsuit against the Nasdaq-listed firm last month, accusing it of not registering as a broker. Armstrong stated that if Coinbase had accepted this proposal, it could have established a precedent that might render a majority of American crypto businesses operating unlawfully unless they registered with the SEC.
Although the SEC’s lawsuit identified 13 cryptocurrencies on Coinbase’s platform as securities, it did not mention Ethereum or several other major tokens, adding to the uncertainty surrounding Gensler’s position on these assets.
If the SEC were to obtain greater oversight, it could lead to more stringent compliance standards for crypto exchanges.
Regulatory clarity in the US crypto market remains elusive, and businesses that assume these crypto tokens are not securities may need to suspend their operations. The SEC has not yet provided an official statement on the potential implications of a settlement that would require Coinbase to delist all tokens except Bitcoin.
Consequently, the future of the crypto industry in the US hangs in the balance as significant changes could have substantial effects on public offerings or retail trading of tokens.
Nevertheless, a glimmer of hope emerged in the battered cryptocurrency industry following the recent Ripple ruling, injecting some optimism into the market.
