In a July 31 interview with the Financial Times, Armstrong revealed that the U.S. Securities and Exchange Commission wanted the exchange to delist the nearly 250 tokens on its platform prior to it filing a lawsuit against the exchange.

At the time, the SEC reportedly said it believes "every asset other than Bitcoin is a security," said Armstrong.

"We said, well how are you coming to that conclusion? Because that's not our interpretation of the law," Armstrong added.

He recounted that the regulator said, "we're not going to explain it to you; you need to delist every asset other than Bitcoin."

It's a similar view held by SEC Chair Gary Gensler, who claimed in a February New York Magazine interview that "everything other than Bitcoin" is a security under the agency's remit.

Armstrong said that agreeing to the SEC's request could've set a precedent and "would have essentially meant the end of the crypto industry" in the United States.

"It kind of made it an easy choice [...] Let's go to court and find out what the court says."

The SEC sued Coinbase in early June, alleging it operated as an unregistered exchange and named 13 cryptocurrencies it said Coinbase offered as unregistered securities. Days earlier, the regulator filed a similar complaint against Binance.

The SEC told the Financial Times its enforcement division does not make formal requests for "companies to delist crypto assets" but that its staff may share its view on what actions could violate securities laws.