One day after the lawsuit against Binance, the United States Securities and Exchange Commission (SEC) sued the bitcoin (BTC) and cryptocurrency exchange Coinbase, under the same allegations, that this company allegedly committed violations of the federal securities laws.
The accusation presented the SEC in federal court in New York. In the lawsuit, the regulatory body indicated that Coinbase had operated an unregistered stock exchange, broker, and clearing agency before the federal office. He also accused the exchange of failing to register the offer and sale of its staking program as a cryptocurrency service.
According to the SEC, Coinbase has made “billions of dollars” by “illegally” facilitating the buying and selling of securities of cryptoactives. This, “at least since 2019”, according to the regulator.
In the opinion of this body, the exchange “intertwines the traditional services of an exchange, broker and clearing agency without having registered any of these functions with the Commission as required by law.”
The Securities and Exchange Commission contends that Coinbase’s lack of registration “has deprived investors of significant protections, including scrutiny by the SEC, record-keeping requirements, and conflict-of-interest safeguards, among others.” .
Coinbase Refused to Follow Securities Laws, According to the SEC
Gurbir Grewal, who heads the SEC’s compliance division, noted that “Coinbase was fully aware of the applicability of federal securities laws to its trading activities, but deliberately refused to follow them.”
The SEC’s complaint alleges that Coinbase’s activities would have violated “certain registration provisions of the Securities Exchange Act of 1934,” as well as the securities offering registration provisions of the Securities Act of 1933.
In general, SEC prosecution seeks injunctive relief, return of ill-gotten gains plus interest, penalties and other compensation equitable, the regulator said in a statement.
The SEC’s lawsuit against Coinbase was already brewing. A few weeks ago, the second largest cryptocurrency exchange on the market received a Wells Notice from the Securities and Exchange Commission. This type of notification usually precedes an action like the one reported on June 6.
Furthermore, the SEC and Coinbase have been in dispute for several months now. The exchange even took legal action against the regulator, requiring you to clarify how the federal securities laws apply to crypto assets.
The SEC’s indictment against Coinbase comes exactly one day after the regulator sued Binance and its founder and CEO Chanpeng Zhao, precisely for the alleged violation of federal securities laws.