The new lawsuit against Coinbase comes just hours after the SEC sued Binance for violating the same US securities rules.
US publicly listed crypto trading platform Coinbase Global Inc (NASDAQ: COIN) has come under the radar of the United States Securities and Exchange Commission (seconds) once again.
This time, Coinbase was indictment in New York federal court earlier today for operating as an unregistered national securities exchange and broker, according to the regulator. The lawsuit states that Coinbase has been operating in this manner since at least 2019 when it began conducting crypto transactions.
Coinbase Prime and Coinbase Wallets were named as two products that the firm leveraged to attract investors.
The self-custody Coinbase wallet is recognized for helping investors access liquidity outside of the Coinbase platform and, according to a Twitter post by SEC Chairman Gary Gensler, it “enforces significant protections, including rulebooks that prevent fraud and manipulation.” deprives investors of due diligence, safeguards against conflict of interest and regular oversight”.
In addition, the regulator identified the Coinbase staking service as an investment contract and unregistered securities, similar to offenses and charges brought against the Kraken cryptocurrency exchange earlier in the year. In fact, the staking service was described as a means for investors to make a profit through Coinbase’s managerial efforts.
Therefore, the SEC is requesting that the company be permanently barred and barred from doing so in the future.
Coinbase and the SEC Remain at Loggerheads
Worth mentioning, Coinbase and the SEC have been at each other’s throats for a while, especially when it concerns regulation for the nascent industry.
About two months ago, the American Exchange Received A wells notice from the regulator. According to the notice, the SEC claims to have identified potential violations of US securities laws, and therefore, plans to enforce actions against the exchange. During that time, Coinbase clarified None of its listed assets were securities.
As a result, Paul Grewal, Chief Legal Officer of Coinbase, said:
“If necessary, we welcome a legal process to provide the clarity we are advocating for and to demonstrate that the Commission has not been fair or reasonable in its involvement with digital assets. Then Until then, it’s business as usual.”
The new lawsuit against Coinbase comes just hours after the same regulator sued on Leading digital asset service provider Binance has been indicted for violating the same US securities regulations. binance It was accused of mishandling customer funds and misleading investors and regulators alike. This is in addition to violating Know Your Customer (KYC) regulations that allowed Americans to trade on the platform, stating that they were not allowed.
Like Coinbase did earlier, Binance called out the SEC for failing to provide clarity on crypto regulation. Responding to the lawsuit, the leading trading platform announced that it is ready to defend its position in court. However, the lawsuit had already caused some damage to the crypto market, causing many digital assets to fall.
coinbase share drowned Up 9% after the announcement of the Binance-SEC lawsuit and now the newly filed lawsuit against Coinbase has brought the stock down 13%.
Benjamin Godfrey is a blockchain enthusiast and journalist who loves to write about real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies drives his contributions to well-known blockchain-based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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