- A recent statement made by Coinase CEO highlighted the SEC’s stance.
- The lawsuit could have negative impacts on the emerging memecoin hype on BASE.
On 6 June, the SEC charged Coinbase with violating federal securities law, accusing the company of acting as a broker, exchange, and clearinghouse for unregistered securities, including 13 cryptocurrencies. In response, Coinbase refuted the SEC’s action, asserting that the regulator breached due process and represented an abuse of discretion.
The saga continues
According to Coinbase CEO, before suing the exchange, the SEC requested it to cease trading in all cryptocurrencies other than Bitcoin.
This signaled its intention to exert regulatory authority over a broader segment of the crypto market. The SEC’s case identified 13 cryptocurrencies on Coinbase’s platform as securities, placing the exchange under its regulatory oversight.
In an interview with the Financial Times, Brian Armstrong said the SEC insisted that all assets, except Bitcoin, were deemed securities without providing further clarification. The SEC’s push for Coinbase to delist over 200 tokens reflects the agency’s aim to expand its jurisdiction within the cryptocurrency industry.
Had Coinbase complied with the SEC’s request, it could have established a precedent requiring most American crypto businesses to operate within the commission’s regulations.
The Coinbase CEO emphasized that they felt compelled to contest the SEC’s request. Armstrong told the FT that,
“We really didn’t have a choice at that point. Delisting every asset other than bitcoin, which by the way is not what the law says, would have essentially meant the end of the crypto industry in the U.S.”
Given the magnitude of the decision and its potential consequences, Coinbase opted to pursue legal action to seek clarity from the court on the matter according to Brian.
Crypto community goes for BALD and BASED
SEC’s actions could also impact the massive interest showcased by the crypto community for memecoins on the BASE network.
Coinbase’s recently launched BASE network for developers has experienced a surge in activity related to meme coins. Traders flocked to purchase tokens like BALD, COIN, and BASED using the DEX LeetSwap.
In the past 24 hours, LeetSwap recorded nearly $200 million in trading volume through 377,000 transactions. Half of the volume was due to BALD transactions which surged by 3100%. The token could potentially be a reference to Coinbase CEO Brian Armstrong’s shaved head.
Meanwhile, BASED bounced, held a market capitalization of $291 million, and grew significantly, despite being around for less than 24 hours. BASE’s public launch is scheduled for August. And till then withdrawing tokens from BASE before the official launch involves additional considerations.
Coinbase collaborated with Optimism, an Ethereum scaling solution utilizing Optimistic Rollups, to develop BASE.
This was one of the many reasons why users were flocking to the Optimism protocol over the last few weeks. However, Optimism could soon be one of the protocols that could get caught in the crossfire between Coinbase and SEC.
On the contrary, this could be seen as a bullish signal for BTC. The SEC explicitly stated that it does not view Bitcoin as a security.
Source: Dune Analytics