Investing.com -- The U.S. Securities and Exchange Commission requested that Coinbase (NASDAQ:COIN) cease trading in all digital tokens except for Bitcoin prior to filing a lawsuit against the cryptocurrency exchange, according to the Financial Times.
In an interview, Coinbase Chief Executive Brian Armstrong told the paper that the SEC "said...we believe every asset other than bitcoin is a security." Armstrong added that the regulators then asked that Coinbase delist all of the more than 200 tokens it offers to customers, apart from Bitcoin.
Armstrong refuted the claim, saying that agreeing to the shutdowns "would have essentially meant the end of the crypto industry in the U.S." Instead, he said Coinbase decided to challenge the SEC's assertions in court.
Signs are emerging that the SEC may be attempting to gain more control over the crypto industry, with Chair Gary Gensler arguing that most cryptocurrencies qualify as securities, or tradeable financial assets. Coinbase was sued by the SEC last month for failing to register as a broker.
Should the SEC win this case, it could set a precedent for the power regulators in the U.S. have over crypto businesses and potentially lead to more stringent compliance rules.
For its part, the SEC told the FT that its enforcement division did not make formal requests for "companies to delist crypto assets." It also declined to comment on what the delisting would mean for the crypto industry.