- The SEC has charged Coinbase with operating an unregistered securities exchange.
- Coinbase is also accused of failing to register its crypto asset staking-as-a-service program.
- The charge comes barely 24 hours after the SEC filed a suit against Binance.
In a significant development in the crypto industry, the U.S. Securities and Exchange Commission (SEC) has charged Coinbase, a leading US-based crypto exchange, with operating as an unregistered national securities exchange, broker, and clearing agency.
Interestingly, this suit comes barely 24 hours after the regulator filed a similar lawsuit against the largest crypto exchange, Binance. Coinbase is also accused of failing to register its crypto asset staking-as-a-service program, according to an SEC complaint filed in the U.S. District Court for the Southern District of New York.
The SEC argued that since 2019, Coinbase had facilitated the buying and selling alleged crypto asset securities worth billions of dollars without the necessary registration with the Commission.
The complaint asserts that Coinbase has merged the functions of exchange, broker, and clearing agency but failed to comply with the legal requirements for any of these roles. Specifically, Coinbase is accused of providing a marketplace for securities, executing transactions on behalf of its customers, and acting as a securities depository without proper registration.
According to the regulator, these actions have deprived investors of crucial safeguards, such as SEC oversight, recordkeeping, and protection against conflicts of interest.
At the time of writing, Coinbase has not commented on the lawsuit. However, the CEO of Binance remarked that if the SEC had to pick a fight with everyone, it implies the fault is on the agency’s side.
Recently, executives of the Coinbase exchange, including its Chief legal officer, issued a stern warning, as reported by Coin Edition, that it would defend itself vigorously in court if the SEC’s regulatory actions ever came to that.
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