Coinbase joins Binance in SEC’s crosshairs amid wider crypto crackdown by US regulators

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solo7 June 2023Last Update : 4 months ago
Coinbase joins Binance in SEC’s crosshairs amid wider crypto crackdown by US regulators

The lawsuit filed by the SEC comes a day after Binance, the world’s largest crypto exchange, was also hit with legal action by US regulators.

Coinbase has been targeted by US regulators in a new lawsuit on Tuesday that alleges the cryptocurrency platform is operating as an unregistered securities platform and brokerage service.

The Securities and Exchange Commission (SEC) lawsuit comes just a day after it filed charges against Binance, the world’s largest crypto exchange, and its founder Changpeng Zhao, an unregistered exchange, for allegedly misappropriating investor funds. operating as and many U.S. is infringing. Securities Law.

Shares of Coinbase fell nearly 15 percent early Tuesday.

In its complaint, the SEC said that Coinbase acted as an intermediary for cryptocurrency buyers and sellers, but did not provide legitimate protections to investors by acting as a broker.

“Coinbase has for years defied the regulatory framework and disclosure requirements developed by Congress and the SEC to protect national securities markets and investors,” the SEC said in its complaint. District of New York.

It seeks injunctive relief, undue benefit as well as interest, penalty and other equitable relief.

Coinbase said that the SEC has not been transparent about how it regulates cryptocurrencies.

‘The solution is legislation that allows for fair rules’

“The SEC’s reliance on an enforcement-only approach in the absence of clear regulations for the digital asset industry is harming US economic competitiveness and companies like Coinbase that have a commitment to compliance,” said Paul Grewal, Chief Legal Officer and General Said lawyer for Coinbase, said in a written statement.

“The solution is legislation that allows fair rules for the road to be transparently developed and uniformly enforced, not litigation. In the meantime, we will continue to conduct our business as usual”.

The SEC warned Coinbase in March that it could face securities charges and had long indicated that Coinbase was flouting securities laws with its position that cryptocurrencies were not securities and therefore should not be allowed as a broker. No registration was required.

“You can’t ignore the rules because you don’t like them or you would prefer differently: the consequences for the investing public are enormous,” said Gurbir S Grewal, director of the SEC’s enforcement division. In prepared statement.

US prosecutors and the SEC in December indicted FTX founder Sam Bankman-Fried on charges of money laundering, fraud and securities fraud.

His criminal trial is likely to take place in the autumn.

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