Coinbase Global Inc. (COIN) was sued by the Securities and Exchange Commission, on June 6. In a press release the federal government agency said that the crypto company was operating as “an Unregistered Securities Exchange, Broker and Clearing Agency.” The SEC also noted that Coinbase failed to register “the offer and sale of its crypto asset staking-as-a-service program.” The stock fell by 12.68 percent today, June 6, at 1.40 pm.
SEC Chair Gary Gensler said that they allege that Coinbase was subject to U.S. securities laws but had “commingled and unlawfully offered exchange, broker-dealer and clearinghouse functions.” He also noted that “these functions” were “separate” in other securities markets in the nation and more.
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Gurbir S. Grewal, who is the Director of the SEC’s Division of Enforcement, said that rules could not be ignored just because they were disliked or a company preferred different ones. The director also said that the action taken by them was to “hold Coinbase accountable for its choices.”
Coinbase is a crypto currency exchange that operates in many countries around the world. Brian Armstrong is the chief executive and co-founder of Coinbase. The international exchange is a publicly traded company that is based in the U.S.
The S.E.C. has been filing cases across the crypto industry as crypto companies have generally been playing against the rules. The first collapse of a major crypto company was FTX. Its CEO Sam Bankman-Fried faces criminal charges and has pled not guilty while other founding and senior executives are cooperating with the authorities, after pleading guilty.
On June 5, the SEC cracked down on Binance and its founder Changpeng Zhao and filed 13 charges on Monday. Today, the SEC has filed charges against Coinbase.
The SEC also said that state securities regulators had assisted them and expressed gratitude to the task force from the following states:
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