In early June 2023, the US Securities and Exchange Commission filed a lawsuit against Coinbase, the largest American cryptocurrency exchange. The platform was accused of operating as an unregistered broker, although in general the case was built around the expected resources trading cryptocurrencies for unregistered securities there. Thus, previous SEC representatives immediately took measures to stop exchange trading of almost all coins.

In general, the lawsuit against Coinbase was based on the unification of three market participants within the exchange in accordance with what is happening in the world of traditional finance. We are talking about brokers, the national securities exchange and clearing agencies, which the American company did not register.

The SEC’s lawsuit against Coinbase has raised a lot of questions from the cryptocurrency community. First of all, the exchange turned into a public company in the spring of 2021, and for this purpose it, among other things, underwent an inspection by SEC employees. And since they did not find any violations in the giant’s activities then, the regulator’s current claims seem at least suspicious.

Armstrong shared details of the situation during an interview with the  Financial Times today. According to him, representatives of the US Securities and Exchange Commission asked Coinbase management to stop trading in all crypto assets with the exception of Bitcoin. This happened before a lawsuit was filed against the exchange in early summer. Thus, the SEC wanted to assert regulatory authority over a broader segment of the market. At the same time, such a recommendation was explained by the fact that Coinbase was not registered as a broker.

Apparently, the regulator wanted to achieve victory in a simplified way. However, in this case, the SEC asked to stop trading in more than 200 cryptocurrencies and tokens. At the same time, in its official lawsuit against Coinbase from early June, the regulator named only 13 assets as securities.

Thus, the Commission wanted to prove that the exchange needed to register with the regulator and interact more actively with it. Then, due to the accusations, the cryptocurrencies of the Solana, Cardano and Polygon networks suffered most noticeably, since the regulator had not previously commented on the listed coins.