Coinbase Probed by The SEC Over Unregistered Security Trading Allegations
2022.07.27 02:45
Coinbase Probed by The SEC Over Unregistered Security Trading Allegations
- U.S. Securities and Exchange Commission (SEC) calls out Coinbase (NASDAQ:COIN) for trading of 9 unregistered securities
- Coinbase affirms ‘we don’t trade securities‘, 7 out of 9 alleged ‘securities’ still active on the platform
- Last week, the first crypto insider trading case made waves, with ex-manager Ishan Wahi exploiting info
Last week was hot as hell for Coinbase, as the company had to deal with first-ever crypto insider case, as Ishan Wahi exploited information to make millions in silence. Today, The U.S. Securities and Exchange Commission (SEC) launched an investigation on whether Coinbase let their clients illegally trade 9 coins. According to the SEC, they should have been registered as securities, rather than digital assets.
Crypto exchange Coinbase faces SEC probe over securities – Bloomberg News https://t.co/2qv2xkfNdD pic.twitter.com/qveX5caRrY
— Reuters (@Reuters) July 26, 2022
Coinbase Has a Different Opinion
As the SEC goes wild on crypto, no wonder the biggest American crypto exchange is their number one target. Fully aware of the allegations, Coinbase still trades 7 out of 9 alleged ‘securities’. In addition, Coinbase Global fought back with a petition demanding The SEC to provide a legal framework for trading digital assets, as they ‘don’t list securities’.
‘Laws from the 1930s couldn’t predict crypto’, – reads the official Coinbase Global tweet, introducing the petition against SEC. Coinbase requests The Sec to ‘to issue securities rules that work for crypto securities and unlock a new market for US consumers, developers, and platforms’. Furthermore, Coinbase’s legal head Paul Grewal said he is ‘looking forward to engaging with The Sec’.
In response to the probe issued by The SEC, Coinbase fired back with a mantra-like blog post, affirming once again that ‘Coinbase does not list securities. End of story’. However, it is very unclear who has the upper hand in the lawsuit.
I’m happy to say it again and again: we are confident that our rigorous diligence process—a process the SEC has already reviewed—keeps securities off our platform, and we look forward to engaging with the SEC on the matter. A refresher: https://t.co/SaacvrZEiU
— paulgrewal.eth (@iampaulgrewal) July 26, 2022
The SEC is Clear on Bitcoin (BTC) & Ethereum (ETH)
In contrast, The SEC previously clarified that they don’t see Bitcoin (BTC) as a security. The same applied to Ethereum (ETH), but the agency was quick to get into an altercation with Ripple (XRP), as the #7 ranked altcoin got hit with a massive $1.3 billion lawsuit by The SEC in late 2020.
Why You Should Care
The beef between Coinbase Global and The U.S. Securities and Exchange Commission (SEC) presents an opportunity for the crypto world in terms of developing a legal framework. However, if The SEC wins the case, crypto enthusiasts could be exposed to big fines for trading the illicit coins.
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