Discover the captivating story of Coinbase, the crypto exchange platform, which courageously refused to submit to the demands of the US SEC. Go behind the scenes of an epic legal battle where the future of the crypto industry in the US hung in the balance, as Coinbase stood up to defend its vision against the all-powerful regulatory authority.
Once upon a time, in the ever-changing world of cryptos, there was a bold and visionary exchange platform: Coinbase. This American company had opened the doors of financial innovation to millions of users thirsting for financial freedom. But as crypto and blockchain gained in popularity, a regulatory storm loomed on the horizon, threatening to upend the future of the US crypto industry.
Then came a startling revelation: the Securities and Exchange Commission (SEC), guardian of US financial laws, had issued an imperative request to Coinbase. It demanded that the crypto exchange stop trading in all cryptocurrencies listed on its platform, with the exception of Bitcoin (BTC). According to the SEC, only cryptocurrencies that could be considered financial securities were allowed to be traded.
Brian Armstrong, Coinbase’s charismatic CEO, spoke out in an interview with the Financial Times, revealing the background to this confrontation with the regulator. He reported that the SEC considered all cryptocurrencies, including Ethereum (ETH), to be financial securities, with the exception of Bitcoin.
Coinbase, a great determination!
But Coinbase was not to be intimidated so easily. Refusing to bow to these baseless demands, the crypto exchange preferred to face the SEC in court. For them, it was a matter of principle, a defense of the crypto industry’s core values and its mission to open the doors of finance to all.
“We really had no choice at the time. Delisting all assets other than bitcoin would have essentially meant the end of the crypto industry in the US,” Brian Armstrong confided. They had decided to resist, to take on the regulator in search of a stranglehold on the entire crypto sector.
The legal battle was on, and the fate of the crypto industry hung in the balance. Coinbase could not afford to back down, as the outcome of this trial would have an impact on the entire digital ecosystem in the United States.
Meanwhile, another battle was raging: the lawsuit between the SEC and Ripple (XRP). A favorable court decision in favor of Ripple, ruling that the XRP cryptocurrency was not a financial security, strengthened Coinbase’s resolve. This case law paved the way for hope, because if XRP could be considered a cryptocurrency and not a financial security, this could also apply to other digital assets.