Brian Armstrong to FT: The SEC “said…we believe every asset other than bitcoin is a security.”

Coinbase CEO Brian Armstrong revealed that the U.S. SEC asked the company (NASDAQ: COIN) to delist all cryptocurrencies except Bitcoin, which he believed would have led to the demise of the entire cryptocurrency industry in the United States.

The SEC’s demand came while it was preparing to sue Coinbase for allegedly operating as an unregistered broker.

Armstrong clarified that adhering to the request would have established a precedent, compelling the majority of U.S. crypto companies to function unlawfully unless they registered with the SEC. (Fortune)

“We really didn’t 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 U.S.,” Armstrong told the FT.

“It kind of made it an easy choice …  let’s go to court and find out what the court says,” he added.

The classification of cryptocurrencies as securities or commodities has been a point of contention, with SEC Chair Gary Gensler considering most cryptocurrencies as securities, except for Bitcoin, which he views as a commodity.

However, the SEC clarified to the FT that its enforcement division did not issue formal requests for “companies to delist crypto assets.” Additionally, the SEC chose not to comment on the potential implications of such delistings for the crypto industry.

The crypto industry has faced regulatory challenges, including lawsuits against Coinbase and Binance, and the market experienced significant volatility and downturns in recent years. Despite a partial recovery, Bitcoin’s price remains far below its all-time high.

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Image Credit (Brian Armstrong – TechCrunch Disrupt 2018 03): Wikimedia