Coinbase CEO Brian Armstrong has revealed that the US Securities and Exchange Commission (SEC) requested the exchange to halt trading in all cryptocurrencies other than Bitcoin prior to suing the platform over more than 200 tokens it offers.

According to Armstrong, the SEC believed that every asset other than Bitcoin is a security, but Coinbase disagreed and asked for an explanation on the legal basis. However, the SEC refused to explain and demanded Coinbase to halt trading in cryptocurrencies other than Bitcoin.

If Coinbase had agreed to the SEC's request, it could have set a precedent that would have left the vast majority of American crypto businesses operating outside the law unless they registered with the commission.

The revelation has sparked widespread attention and controversy over the legal definition of cryptocurrencies and securities.