Alexander Savenkov Following the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Binance, the San Francisco-based exchange, Coinbase, is now being targeted by the regulatory body. The SEC claims that Coinbase has violated several securities regulations and has been operating as an unregistered broker since 2019.
SEC Alleges Unregistered Brokerage and Securities Offenses by Coinbase
The SEC is cracking down on another cryptocurrency platform, this time focusing on Coinbase for allegedly acting as an unregistered broker and violating various securities laws. While Coinbase has conducted compliance checks on specific cryptocurrencies using the Howey test, the SEC alleges that the company has listed several digital assets that do not pass the test or fall under the category of investment contracts.
Regarding the classification of individual assets as securities, the SEC argues that coins such as ICP, AXS, CHZ, FLOW, DASH, VGX, FIL, NEXO, NEAR, ADA, SAND, SOL, and MATIC meet the criteria of being investment contracts. SEC Chair Gary Gensler stated, “We allege that Coinbase, despite being subject to the securities laws, combined and unlawfully offered exchange, broker-dealer, and clearinghouse functions.” He further added:
Furthermore, as we allege, Coinbase failed to register its staking-as-a-service program as required by securities laws, depriving investors of crucial disclosure and other protections.
The SEC’s concern with Coinbase’s staking platform revolves around the firm’s failure to submit adequate documentation to regulators for offering such services. As a result, Coinbase is charged with withholding significant information about the program from investors and violating the registration requirements outlined in the Securities Act of 1933. Following this news, the overall cryptocurrency market experienced a decline, with values decreasing by 4.4% in the last 24 hours, bringing the global market cap to approximately $1.13 trillion.
Coinbase’s stock has dropped nearly 16% since these developments, reaching $58.71 per share during pre-market trading sessions. However, the shares have shown a 1.04% increase over the past month and a 38.42% increase over the past six months. In a similar vein to the allegations against Binance, the SEC highlighted that Coinbase operated multiple entities without proper registration and listed digital assets that the regulator considers securities.
What are your opinions on the SEC’s legal actions against Coinbase? Feel free to share your thoughts and perspectives on this matter in the comments section below.
Table Of Contents
Frequently Asked Questions (FAQs) about SEC lawsuit against Coinbase
What is the SEC lawsuit against Coinbase?
The SEC (U.S. Securities and Exchange Commission) has filed a legal case against Coinbase, a San Francisco-based exchange. They allege that Coinbase has been functioning as an unregistered broker since 2019 and has violated multiple securities regulations.
What are the specific allegations made by the SEC?
The SEC claims that Coinbase has listed cryptocurrencies that fail the Howey test or qualify as investment contracts. They argue that coins like ICP, AXS, CHZ, FLOW, DASH, VGX, FIL, NEXO, NEAR, ADA, SAND, SOL, and MATIC meet the criteria of being investment contracts. Additionally, Coinbase is accused of operating multiple entities without proper registration and failing to disclose information about their staking-as-a-service program.
How has the market reacted to the news?
Following the SEC’s lawsuit, the cryptocurrency market experienced a decline, with a decrease of 4.4% in the past 24 hours. Coinbase’s stock also plummeted by nearly 16%. However, it’s important to note that the stock has shown positive growth over the past month and six months.
What are the potential consequences for Coinbase?
If the SEC’s allegations are proven true, Coinbase may face legal penalties, fines, or sanctions. The outcome of the lawsuit will depend on the evidence presented and the decisions made by the court. It remains to be seen how this legal action will impact Coinbase’s operations and reputation in the long run.
More about SEC lawsuit against Coinbase
- U.S. Securities and Exchange Commission (SEC)
- SEC Charges Coinbase with Operating Unregistered Securities Exchange
- Coinbase Faces SEC Lawsuit Over Unregistered Brokerage
- Coinbase Stock Drops Following SEC Lawsuit
- Howey Test
3 comments
Oh man, SEC always bein’ a pain in the butt for these exchanges. Now they’re goin’ after Coinbase too? Not surprised. They say Coinbase been doin’ some shady stuff, like unregistered brokerage and violatin’ securities laws. Stock takin’ a hit, crypto market too. Gotta see how this plays out!
SEC ain’t holdin’ back, huh? They’re throwin’ allegations left and right, sayin’ Coinbase been breakin’ the rules. Unregistered broker, shady coins, you name it. This ain’t good for the market, prices already droppin’. Wonder if Coinbase can bounce back from this mess.
SEC’s crackdown on Coinbase is somethin’ else. They’re claimin’ the exchange been operatin’ without proper registration and listin’ coins that they think are securities. Stocks tankin’, market sufferin’. This ain’t what we need, man. Gotta keep an eye on how it all unfolds.