• The SEC is suing Coinbase for allegedly violating securities laws, potentially exposing investors to significant risk.
• This follows similar action against Binance the day before.
• The lawsuit alleges that Coinbase operated as an unregistered broker, exchange, and clearing agency and offered unregistered securities via its Staking Program.
SEC Sues Coinbase For Securities Law Violations
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase, America’s biggest cryptocurrency exchange, for allegedly breaching securities laws. The regulator claims that Coinbase operated as an unregistered broker, exchange, and clearing agency and offered unregistered securities via its Staking Program without registering with the SEC or providing adequate disclosure to investors of risks associated with their investments.
SEC Alleges Risks To Investors
The SEC alleges that by not obtaining proper registration or providing adequate disclosure of risks associated with investing in digital assets on their platform, Coinbase exposed investors to significant risk while prioritizing profit over investor interests and legal compliance.
Similar Action Against Binance
This lawsuit comes a day after the SEC filed similar charges against Binance — one of the world’s largest crypto exchanges — for similar violations of securities laws.
Genesis Plan Extension Granted
In related news, Genesis was granted a plan extension but FTX was not allowed to take part in mediation related to the case due to conflicts of interest between representatives from both companies.
„Very Confident“ In Winning Against Exchanges
Michael Gensler — the new chairman of the SEC — stated he is „very confident“ that they will win their cases against both Coinbase and Binance when asked about it during his confirmation hearing this week. Following these lawsuits being announced, trading volume on decentralized exchanges grew 88%, while stocks in Coinbase fell 15%.