ChainCatcher reported that before suing Coinbase, the U.S. Securities and Exchange Commission (SEC) had asked Coinbase to stop all cryptocurrency transactions other than Bitcoin, according to the Financial Times. Coinbase CEO Brian Armstrong told the Financial Times that after the SEC made the above suggestion, it filed a lawsuit against the Nasdaq-listed company last month because the company failed to register as a broker.

The SEC's case identified 13 cryptocurrencies with smaller trading volumes on the Coinbase platform as securities, and claimed that by offering these cryptocurrencies to customers, the trading platform fell within the regulator's purview.