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In the words of the SEC Chair Gary Gensler, “We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions.”
Less than a day after suing Binance, the SEC cracked down on Coinbase for selling securities without registering with the regulators.
Earlier in March, the regulatory body issued a Wells notice to Coinbase over allegations of securities law violations. This resulted in Coinbase requesting the court to compel the SEC to provide clarity on crypto regulations.
Today we charged Coinbase, Inc. with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency and for failing to register the offer and sale of its crypto asset staking-as-a-service program.https://t.co/XPG2gDkxtV pic.twitter.com/hCdVMw8B2v
— U.S. Securities and Exchange Commission (@SECGov) June 6, 2023
In the latest update to the Coinbase-SEC feud, the regulatory body accused Coinbase of unlawfully providing trading services for crypto securities. The court filing submitted by the SEC identified thirteen tokens offered by Coinbase as securities. These includes Solana (SOL), Polygon (MATIC), Axie Infinity (AXS), and even Nexo (NEXO) tokens.
Moreover, the SEC targeted Coinbase’s Staking Program over its failure to provide appropriate risk disclosure to clients. The SEC added,
“Coinbase’s failure to register has deprived investors of significant protections, including inspection by the SEC, recordkeeping requirements, and safeguards against conflicts of interest, among others.”
As a result, Coinbase’s shares have plummeted by over 20% in just the first hour after the SEC filed its latest lawsuit against the firm.
Meanwhile, the regulatory body filed similar charges against rival exchange Binance. The SEC’s lawsuit against Binance caused over $780M in net daily outflows from its international platform. Additionally, Binance’s BNB (BNB) token has declined by 8.76% in the last 24 hours.