The SEC demanded that Coinbase cease all its crypto activities, with the only exception being Bitcoin transactions.
Brian Armstrong told the FT that the SEC had requested his financial data before filing a lawsuit against his business. The SEC claimed that Coinbase was operating in violation of US laws without the proper licenses on July 6.
According to the SEC, 13 of the cryptocurrencies on Coinbase are securities and subject to regulation. The SEC also wants to remove more than 250 tokens from the platform, leaving only Bitcoin. This shows how the SEC is trying to control the industry.
The crypto industry faced a shock when the pre-lawsuit recommendation revealed the SEC’s ambition to extend its authority over more of the market.
The SEC’s chief, Gary Gensler, has repeatedly expressed his view that most digital currencies, except Bitcoin, fall under the category of securities. However, the SEC did not include Ethereum (ETH), the second-biggest crypto, in its lawsuit against Coinbase. This created doubts about whether Ethereum is a security or not.
The exchange had to stop staking services in four US states due to legal challenges. California, New Jersey, South Carolina, and Wisconsin users can’t stake until further notice.