• The US Securities and Exchange Commission (SEC) has charged Coinbase, Inc. with operating an unregistered platform and offering unregistered securities related to its staking-as-a-service program.
• The SEC also identified 13 cryptocurrencies as securities in the complaint against Coinbase.
• Coinbase’s Chief Legal Officer, Paul Grewal, responded to the lawsuit by calling for legislation that would allow fair rules for the digital asset industry.
SEC Charges Coinbase With Unlawful Offering of Securities
The US Securities and Exchange Commission (SEC) announced on Tuesday that it had charged cryptocurrency exchange Coinbase, Inc., with operating its platform without registration in the capacity of an exchange, broker or clearing agency. The regulator also alleged that Coinbase unlawfully offered securities related to its staking-as-a-service program.
13 Cryptocurrencies Identified as Securities
The SEC complaint further identified 13 cryptocurrencies as securities: SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH and NEXO. This is similar to the list of coins included in the SEC’s lawsuit against Binance on Monday.
Response from Paul Grewal
In response to the charges brought by the SEC against his company’s platform and services offerings Paul Grewal – Chief Legal Officer at Coinbase – called for legislation that would transparently create fair rules for all entities involved in the digital asset industry: “The solution is legislation that allows fair rules for the road to be developed transparently and applied equally… In the meantime we’ll continue to operate our business as usual.”
SEC Crackdown Continues
This week’s lawsuits against Binance and now Coinbase are indicative of a broader crackdown by regulators aimed at increasing oversight within the burgeoning cryptocurrency sector. As Gary Gensler – Chair of the SEC – stated: “You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: The consequences for investing public are far too great.”
Coinbase has become yet another crypto exchange targeted by regulators this week who are seeking greater control over activities within this nascent market sector. It remains unclear how other exchanges will respond but it is likely that more enforcement actions could follow if they do not comply with applicable laws and regulations going forward.