Crypto exchange Coinbase is set to delist unauthorized stablecoins from its European branch by year-end, in response to incoming MiCA regulations.

U.S.-based cryptocurrency exchange Coinbase will remove all non-compliant stablecoins from its European exchange by the end of this year, as the company moves to comply with the European Union’s new crypto regulations, Bloomberg has learned.

The Markets in Crypto-Assets framework, which came into effect in June for stablecoin issuers, requires companies to hold e-money authorization in at least one Europe’s member state. Further regulatory guidelines for exchanges like Coinbase will be enforced starting Dec. 31.

A spokesperson for Coinbase told Bloomberg that the exchange plans to restrict services related to non-compliant stablecoins, including Tether’s (USDT) by Dec. 30. The exchange will provide users with an update in November, outlining options to convert their holdings to alternatives such as Circle’s USD Coin (USDC).

In early July, French blockchain analytics firm Kaiko said in a research note that Circle has benefited from the MiCA regulations, with its stablecoins experiencing significant increases in daily trading volumes following the introduction of the new requirements.

Still, industry leaders have expressed concerns about the regulations. For instance, Tether CEO Paolo Ardoino cautioned that stringent cash reserve requirements could pose systemic risks to banks.

The delisting trend is not limited to stablecoins as Kraken recently announced it would halt trading and deposits of Monero (XMR) in the European Economic Area due to regulatory changes, following similar moves by Binance and OKX.

Paul Grewal, the Chief Legal Officer at Coinbase has spotted some inconsistencies in crucial legal claims of the United States Securities and Exchange Commission (SEC). The basis for his opinion was the Lejilex lawsuit controversy that had the regulator file a reply brief.

Coinbase Support For Lejilex in SEC Lawsuit

In the Lejilex case, the SEC argued “whether a digital-asset transaction is a securities transaction is not determined by the nature of the asset.” However, Grewal pinpointed that the Commission argued the precise opposite to Judge Failla in its case.

He claimed the SEC is obviously telling one judge one thing and telling the other something else.

The Coinbase executive does not think this level of inconsistency should be tolerated from US authorities. The American cryptocurrency exchange has been backing Lejilex for the past few months against the SEC. In July, it showed it support to the firm by filing Amicus Brief challenging the U.S SEC’s overreach. Coinbase’s argument has always been for the SEC to provide clarity on the regulation for the crypto industry.

Grewal once stated that Coinbase will do everything within its jurisdiction to get regulatory certainty for the millions of Americans who own cryptocurrencies. The firm has done this in many ways including appealing the denial of rulemaking petition from the US SEC.

Furthermore, he highlighted that regulation by enforcement is bad for consumers, restricts innovation and hurts the US economy.

SEC Lawsuits With Ripple

On Coinbase lawsuit with the SEC, there has been an unexpected pause on the request of the Commission. For context, the government agency requested that the court grant an extension of time to complete discovery. It asked for a four-month extension, pushing the deadline from October 18 to February 18 next year.

While they wait, Coinbase filed a motion to compel the U.S. Commodity Futures Trading Commission (CFTC) to produce communications with issuers of 12 tokens named in a related lawsuit brought by the SEC. This motion is to help it in an ongoing lawsuit in the Southern District of New York (SDNY).

Blockchain payment firm Ripple Labs is also a victim of the consistent crypto crackdown from the SEC. Its case with the regulator has been ongoing for over three years. The US SEC recently filed for a Notice of Appeal in the ongoing case in response to a verdict on XRP’s securities status.

Several pro-XRP lawyers think the regulator does not stand chance this time as well.

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Godfrey Benjamin

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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