After the U.S. Securities and Exchange Commission (SEC) sued Binance, it has now filed a legal case against the San Francisco-based exchange, Coinbase. The SEC alleges that Coinbase breached multiple securities regulations and has been functioning as an unregistered broker since 2019.
SEC Alleges Coinbase Operated an Unregistered Brokerage and Committed Multiple Securities Offenses
The SEC is clamping down on another digital currency platform, this time targeting Coinbase for purportedly operating as an unregistered broker and infringing upon various securities laws. While Coinbase has examined specific crypto assets for compliance with the Howey test, the SEC claims that the company has listed several cryptocurrencies that fail the test or classify as investment contracts.
Regarding the classification of individual assets as securities, the regulatory body contends that coins like ICP, AXS, CHZ, FLOW, DASH, VGX, FIL, NEXO, NEAR, ADA, SAND, SOL, and MATIC meet the criteria of being investment contracts. “We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” stated SEC chair Gary Gensler. He added:
Furthermore, as we allege, Coinbase failed to register its staking-as-a-service program as required by securities laws; again depriving investors of crucial disclosure and other protections.
The SEC’s issue with Coinbase’s staking platform claims that the firm never filed sufficient documentation with regulators to offer such services. As a result of this omission, Coinbase is charged with withholding significant information about the program from investors while infringing on the registration provisions of the Securities Act of 1933. Following the news, crypto markets in general have taken a dip, with values decreasing by 4.4% over the last 24 hours, which presently settles the global market cap at approximately $1.13 trillion.
Coinbase’s stock has plummeted nearly 16% since this development and fell to $58.71 per share during pre-market trading sessions. Nevertheless, shares have increased 1.04% over the past month and 38.42% over the past six months. Echoing the Binance allegations, the SEC emphasized that Coinbase operated multiple entities without proper registration and listed crypto assets that the regulator identifies as securities.
What are your thoughts on the SEC’s legal actions against Coinbase? Share your thoughts and opinions about this subject in the comments section below.
Source: Bitcoin.com
