The United States Securities and Exchange Commission (SEC) has filed a lawsuit against coinbasethe main exchange of cryptocurrencies of that country. The agency accuses Brian Armstrong’s company of violate US securities laws by operating as an unregistered stock exchange, broker, and clearing agency.
The accusations against Coinbase do not only fall on the operations of its cryptocurrency exchange platform. They also affect Coinbase Prime, its trading and custody of assets for large clients, and to the Coinbase Wallet. According to the SEC, since at least 2019, the company has made billions of dollars from allowing the buying and selling of cryptocurrencies that it considers unregistered securities.
But the story does not end there. The SEC also points to the services of staking that allowed Coinbase users generate returns through your investments. The latter has been a point of conflict between the parties in recent months, since in April the body had threatened the exchange with suing him if he did not stop offering it to his customers.
“The Coinbase platform merges three functions that are typically separate in traditional securities markets: brokers, exchanges, and clearing agencies. However, Coinbase has never registered with the SEC as a broker, national exchange, or clearing agency. thus circumventing the disclosure regime that Congress has established for our securities markets,” the lawsuit states.
The Coinbase lawsuit comes just a day after the SEC filed one against Binance. In it, the agency targeted those of Changpeng Zhao for allegedly operating illegally in the United States. But not only that, but also for apparently mixing up and diverting billions of dollars from their clients.
Coinbase, in the crosshairs of the SEC
As for Coinbase, regulators accuse it of violating the Securities Act of 1933 and the Securities Exchange Act of 1934. According to a statement issued by the SEC, the lawsuit seeks “precautionary measures, return of illegally obtained profits plus interest, fines and other equitable measures”.
In its complaint, the Securities and Exchange Commission has identified more than a dozen cryptocurrencies that it considers to be unregistered securities. They are MATIC (Polygon), SOL (Solana), ADA (Cardano), AXS (Axie Infinity), SAND (Sandbox), NEXO (Nexo), NEAR (Near), ICP, (Internet Computer), FLOW (Flow) , CHZ (Chiliz), FIL (Filecoin), VGX (Voyager) and DASH (Dash). They are available both in the Coinbase Wallet and in the Coinbase Prime platform.
As of this writing, neither Coinbase nor its CEO Brian Armstrong have commented on the lawsuit. In any case, it would not be unusual for a response to be released in the next few minutes, as happened yesterday with Binance. For now, from the SEC they have left to punish harshly to the American company.
“You simply can’t ignore the rules because you don’t like them or because you prefer different ones. The consequences for the investing public are too great. As alleged in our complaint, Coinbase was fully aware of the applicability of federal securities laws to its commercial activities, but deliberately refused to follow them,” said Gurbir S. Grewaldirector of the Agency’s Compliance Division.
The string of lawsuits against Binance and Coinbase has had an impact on the cryptocurrency market. bitcoin operates at the moment at $25,500, suffering a 4.6% drop in the last 24 hours. While Ethereum has fallen 3.4% and is trading around $1,800.