The Securities and Exchange Commission accuses it of operating its crypto-asset trading platform as a registered national securities broker and of failing to register its crypto-asset placement program as a service.
Crypto Trading Platform Coinbase
On Tuesday, US regulators slammed Coinbase in a new lawsuit that claims the cryptocurrency platform operates as an unregistered securities platform and brokerage service.
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The lawsuit was filed a day after the Securities and Exchange Commission filed charges against Binance, the world’s largest crypto exchange, and its founder Changpeng Zhao, accusing them of misappropriating investor funds, operating as an unregistered exchange and violating multiple US laws. Laws on securities.
In its complaint, the SEC said Coinbase made billions by acting as an intermediary for buyers and sellers of cryptocurrency, but failed to provide legal protection to investors by acting as a broker.
“Coinbase has for years violated regulatory frameworks and evaded disclosure requirements created by Congress and the SEC to protect the nation’s securities market and investors,” the SEC’s complaint, filed in the U.S. District Court for the Southern District of Columbia, said. New York area. He is seeking an injunction, garnishment of ill-gotten gains, interest, penalty and other remedies.
Coinbase has announced the layoff of around 950 employees, or 20% of its workforce, saying the cuts are necessary to deal with the worsening crypto recession.
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“The SEC’s reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry is damaging to America’s financial competitiveness and to companies like Coinbase that have demonstrated a commitment to compliance,” said Paul Grewal, Chief Legal Officer and General Counsel. Coinbase, in a written statement. “The solution is legislation that allows fair traffic rules to be transparently developed and fairly applied, not judgment. In the meantime, we will continue our business as usual.”
In March, the SEC warned Coinbase that it could face securities charges and indicated that Coinbase was violating securities laws by saying that cryptocurrencies are not securities and therefore do not need to register as a broker.
“You can’t ignore the rules because you don’t like them or because you prefer other rules: the implications for the investing public are huge,” Gurbir S. Grewal, director of the SEC’s compliance division, said in a statement. , in a prepared statement.
In December, US Attorneys and the SEC charged FTX founder Sam Bankman-Fried with money laundering, wire fraud and securities fraud. He will probably be prosecuted. The Securities and Exchange Commission accused Coinbase of operating as an unregistered national securities exchange, broker and clearing agency, and of failing to register the offering and sale of its betting program as services. . Coinbase has illegally claimed billions since at least 2019 by facilitating the buying and selling of cryptocurrency securities without proper registration.
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The Securities and Exchange Coission (SEC) mandates Coinbase to operate a crypto-asset trading platform as a registered national securities exchange, broker and clearing agency.
Coinbase was also accused of failing to register the offering and sale of its crypto asset placement program as a service.
Users of trading platforms can bet their cryptocurrency, effectively locking up their assets, in exchange for later payments, like earning interest rates on a savings account. These assets are used by platforms such as Coinbase Global to guarantee other transactions that occur on the blockchain. Coinbase has criticized the bidding rules, calling them vague.
The SEC complaint also alleges that Coinbase’s holding company, Coinbase Global Inc. He is the controlling person of Coinbase and therefore also liable for Coinbase’s breach.
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The Securities and Exchange Commission (SEC) has warned Coinbase that it could face securities charges, saying Coinbase has illegally amassed billions of dollars since at least 2019 by facilitating the buying and selling of crypto-asset securities. The agency claims that Coinbase provides traditional stock exchange, broker and clearing agency services as required by law without registering with the coission.
“While Coinbase’s smart decisions have allowed it to make billions, it has done so by depriving investors of the protections they are entitled to. Today’s action is aimed at holding Coinbase accountable for its choices,” said Gurbir Grewal, director of the SEC’s Division of Enforcement. said in a statement on Tuesday.
The SEC’s complaint was filed in the U.S. District Court for the Southern District of New York. He seeks injunctive relief, illegal profits, interest, penalties and other remedies.
This comes a day after the SEC filed a lawsuit against Binance and its founder Changpeng Zhao, accusing them of using investor funds, operating as an unregistered exchange and violating several US securities laws.
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In a social media post, Binance said it was cooperating with the SEC’s investigation, but said the agency “chose to act unilaterally and file a lawsuit.”
Binance, the world’s largest cryptocurrency exchange, is a Cayman Islands limited liability company founded by Zhao, and the charges stem from actions uncovered after the collapse of the second-largest cryptocurrency exchange FTX last year.
In December, US Attorneys and the SEC indicted FTX founder Sa Banken-Fried on multiple counts of money laundering, wire fraud and securities fraud. He will probably be prosecuted.
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Originally posted 2023-06-08 01:38:44.