The US Securities and Exchange Commission (SEC) reportedly asked Coinbase, a leading US cryptocurrency exchange, to suspend trading of all digital assets, except Bitcoin, prior to taking legal action. This move demonstrates the SEC’s intention to broaden its oversight of the crypto market. While SEC Chairman Gary Gensler has expressed his belief that most cryptocurrencies, excluding Bitcoin, are securities, his stance on Ethereum and other altcoins remains uncertain.
Coinbase CEO Brian Armstrong revealed in a recent interview that the SEC had recommended delisting all cryptocurrencies, except Bitcoin, from the platform before filing a lawsuit against the company. Armstrong highlighted that complying with the request could have established a precedent where most American crypto businesses would operate unlawfully unless registered with the SEC.
Notably, the SEC’s lawsuit did not explicitly classify Ethereum or other major tokens as securities, contributing to the ambiguity surrounding Gensler’s stance on these assets.
The potential oversight by the SEC would lead to stricter compliance standards for crypto exchanges, signaling a significant shift in regulatory requirements.
The lack of regulatory clarity in the US crypto market creates uncertainty, forcing businesses that operate under the assumption that crypto tokens are not securities to potentially cease operations. The SEC has not provided official commentary on the implications of a possible settlement that would result in Coinbase delisting all tokens except Bitcoin.
The uncertain future of the crypto industry in the US raises concerns as any significant changes could have a substantial impact on public offerings and retail trading of tokens.
However, the recent Ripple ruling injected some hope into the struggling cryptocurrency industry.