“They came back to us, and they said ... we believe every asset other than bitcoin is a security,” Armstrong said. “And, we said, well how are you coming to that conclusion, because that’s not our interpretation of the law. And they said, we’re not going to explain it to you, you need to delist every asset other than bitcoin.”
Oversight of the crypto industry has hitherto been a grey area, with the SEC and the Commodity Futures Trading Commission jockeying for control.The CFTC sued the largest crypto exchange, Binance, in March of this year, three months before the SEC launched its own legal action against the company. The SEC said its enforcement division did not make formal requests for “companies to delist crypto assets”.
Oversight by the SEC would bring far more stringent compliance standards. Crypto exchanges typically also provide custody services, and borrow and lend to customers, a mix of practices that is not possible for SEC-regulated companies.