SEC Asked Coinbase to Suspend All Crypto Trading Except Bitcoin

• The US SEC requested Coinbase to halt trading on all cryptocurrencies except Bitcoin before lawsuit.
• SEC Chair Gary Gensler has expressed the belief that most cryptocurrencies should be classified as securities.
• Coinbase suspended staking services in four US states to comply with regulatory requirements.

The US Securities and Exchange Commission’s (SEC) recent move sparked controversy, Coinbase was asked to halt trading on all cryptocurrencies except for Bitcoin (BTC). According to the Financial Times, Coinbase CEO Brian Armstrong revealed that this request came before the SEC’s legal action against the company on June 6, where they charged Coinbase for failing to register as a broker.

The SEC identified 13 cryptocurrencies on Coinbase’s platform as securities, asserting that their offering fell under regulatory oversight. What’s even more significant is that the SEC’s suggestion to delist over 250 tokens, leaving only Bitcoin on the exchange, reflects the SEC’s stance in attempting to regulate the industry. 

However, the pre-lawsuit recommendation sent shockwaves through the crypto industry. Indicating the SEC’s intent to expand its jurisdiction over a broader market slice.

Further, SEC Chair Gary Gensler has been vocal about his belief that most cryptocurrencies. Except for Bitcoin, should be classified as securities. Notably, Ethereum (ETH), the second-largest cryptocurrency, was absent from the SEC’s case against Coinbase. That raising questions about its classification as a security.

Moreover, Coinbase suspended staking services in four US states. Including California, New Jersey, South Carolina, and Wisconsin, to comply with regulatory requirements. The decision was made in response to legal issues faced by the exchange. Users in these states won’t be able to use staking services until further notice, as announced in a blog post on July 14.