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The Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase, the leading US-based cryptocurrency exchange and a publicly-traded company. The SEC alleges that Coinbase has violated securities laws by operating as an unregistered broker and exchange since at least 2019. The agency also claims that Coinbase earned billions of dollars while depriving investors of the protections they are entitled to.
SEC Charges Coinbase With Violating Securities Laws
The SEC has charged Coinbase with operating as an unregistered national securities exchange, broker, and clearing agency. Additionally, Coinbase failed to register the offer and sale of its crypto asset staking-as-a-service program. The agency stated that Coinbase made calculated decisions to earn billions of dollars, but at the expense of investors.
COIN shares, Coinbase’s stock, began trading more than 15% down in premarket trading, reacting to the news.
These Coins are Securities, Claims the SEC
One of the central claims of the SEC is that Coinbase is facilitating trade in unregistered securities. As a result, the agency has classified several cryptocurrencies as securities. Among these cryptocurrencies are SOL, ADA, MATIC, FIL, SAND, and AXS. Additionally, CHZ, FLOW, ICP, NEAR, VGX, DASH, NEXO, and others are included.
Brian Armstrong, the CEO of Coinbase, has not yet responded to the SEC’s allegations. However, he has previously urged US regulators for more clarity.