SEC sues Coinbase for operating as an unregistered securities exchange
On Tuesday, the Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase. The Commission claims that Coinbase operated as an exchange, broker and clearing agency without the necessary registration. This complaint came just 24 hours after filing a similar lawsuit against Binance.
According to the SEC’s press release, Coinbase has been illegally working with crypto assets since 2019. At the same time, the exchange was not registered by the Commission, as required by law. The SEC noted that the lack of registration deprived investors of security and important protective measures, including checks by SEC and protection from conflicts of interest.
The SEC noted that Coinbase offered trading securitized investment products that qualify as securities, so the exchange had to meet the requirements set by the regulator. The Commission requires Coinbase to reimburse the proceeds obtained illegally. It has not yet been reported what kind of punishment the exchange may face. Amid this news, the price of the company’s shares fell by 16%.
Coinbase, in turn, stated that all investment products provided by the exchange were in full compliance with the legislation, and that they would defend their rights in court.
The world’s largest crypto exchange, Binance, has also faced a lawsuit from the SEC. This significantly increased the pressure on the exchange, and also sent Bitcoin’s price to the lowest level in three months. The news of the lawsuit against Coinbase also had an impact on its price, but not so significant. A day after the SEC’s claims against Binance were reported, investors withdrew more than $790 million from the exchange.