Before the U.S. Securities and Exchange Commission (SEC) initiated a legal action against Coinbase, the regulatory body reportedly suggested that the cryptocurrency exchange should suspend trading of all crypto assets, except for Bitcoin. This information was revealed by Coinbase CEO, Brian Armstrong, in an interview with the Financial Times.

According to Armstrong, the SEC expressed its view that all assets, barring Bitcoin, were considered securities. However, when Armstrong pointed out that Coinbase’s interpretation of the law differed, the SEC did not provide further explanation for its stance. Instead, the regulatory body insisted that Coinbase should “delist every asset other than Bitcoin.”

The SEC’s lawsuit against Coinbase, filed on June 6, alleged that the company was operating as an unregistered exchange. The lawsuit classified 13 crypto assets as securities, including SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO.

Armstrong stated that complying with the SEC’s advice would have effectively ended the crypto industry in the U.S., as it would mean most crypto businesses in the country would be operating unlawfully unless they registered with the SEC. He believed that seeking the court’s opinion through litigation was a more feasible approach.

The SEC, however, clarified to the Financial Times that its enforcement division does not formally request companies to delist crypto assets. The agency stated that its staff may share their views on conduct that could potentially raise concerns related to securities laws.

Coinbase has been seeking clear guidelines for the crypto industry. The company has criticized the SEC for what it perceives as an unfair and unreasonable approach in dealing with digital assets. In response to the SEC lawsuit, Coinbase has argued that the assets traded on its platform are not considered “investment contracts” and, therefore, should not be classified as securities. The company has also filed a lawsuit against the SEC, seeking regulatory clarity for the industry.