SEC investigates Coinbase, says it may have illegally sold unregistered securities

Coinbase is facing a US Securities and Exchange Commission (SEC) investigation into whether it allowed users to trade digital tokens that should have been registered as securities. Bloomberg has called. Coinbase, which was indirectly involved in another investigation by the SEC and the state of New York, recently caught the regulator’s attention after expanding the number of tokens offered for trading.

After taking a conservative approach to listing cryptocurrencies, Coinbase now allows Americans to trade more than 150 tokens Bloomberg. If any of these are considered a security, it would need to be registered as an exchange with the SEC. A token is considered a security when investors invest funds for a company to benefit from the work of its leadership.

Last week, the commission accused a former Coinbase employee of violating insider trading rules by helping his brother and a friend buy dozens of different types of tokens before listing them on the platform. Coinbase itself has not been accused of wrongdoing, but the SEC said it considers nine of the dozens of digital tokens traded by the men to be securities, including seven that are publicly traded.

In a response from Paul Grewal, Chief Legal Officer, Coinbase said it “does not list any securities on the platform. Point”. As evidence, it said the US Department of Justice “verified the same facts [as the SEC] and elected not to pursue securities fraud charges against those involved.”

Coinbase has previously complained that there is no regulatory framework for digital asset securities. Coincidentally, the company filed a rulemaking motion to clarify those rules just before the SEC filed charges. “Rather than creating bespoke rules in an inclusive and transparent manner, the SEC relies on this type of one-off enforcement action to try to bring all digital assets under its jurisdiction, including the assets that are Not securities,” wrote Grewal.

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