Binance.US Delists Cryptocurrency Cited by SEC as a Security

Despite its small size, AMP looms large because it was one of nine cryptocurrencies cited by the SEC as unregistered securities as part of its investigation of insider trading at Coinbase. 

The entire crypto industry has grown up without clear definitions of the assets within it and regulations for trading. The SEC has informally said that the two largest tokens, bitcoin and ether, aren’t securities. However, both the current SEC chairman,

Gary Gensler,

and his predecessor, Jay Clayton, said that most cryptocurrencies meet the legal definition of a security, potentially putting crypto exchanges in the position of selling unregistered securities.

Binance said its decision was based on the fact that AMP was the only one of the nine cryptocurrencies in the insider-trading case that trades on its platform.

“We operate in a rapidly evolving industry and our listing and delisting processes are designed to be responsive to market and regulatory developments,” Binance wrote in a blog post.

Coinbase previously said that it had conducted an internal investigation of the insider-trading allegations and provided information about the people allegedly involved to the Justice Department. “Coinbase takes this type of illicit behavior super seriously,” said

Paul Grewal,

the company’s chief legal officer. “We have zero tolerance for it.”

While seven of the nine cryptos cited by the SEC trade on Coinbase, the company is adamant that it doesn’t list securities. In a blog post last month, Mr. Grewal said Coinbase has an SEC-reviewed process for determining whether or not an asset is a security, and for that reason the assets have already been determined to not be securities.

“Coinbase does not list securities. End of story,” he wrote.

Write to Paul Vigna at Paul.Vigna@wsj.com