Key points:
- US Regulator Investigating Whether Coinbase Offered Unregistered Securities
- Firm Has Requested Sec Clarifies Digital-Asset Rules
- Inside-Trading Accusation Another Cloud For Coinbase
The Securities and Exchange Commission (SEC) is probing one of the largest cryptocurrency trading platforms, Coinbase Global Inc, as to whether they wrongly allowed Americans to trade digital assets that should have been registered as securities. In turn, Coinbase has requested greater clarity on defining how cryptocurrencies might be seen as securities. This comes in the wake of SEC accusations that a Coinbase former employee broke insider-trading regulations.
US Regulator Investigating Whether Coinbase Offered Unregistered Securities
The SEC, the US financial markets regulator is reportedly looking into the cryptocurrency trading platform Coinbase on suspicion it has allowed US persons to trade in securities that are unregistered. According to a Bloomberg News article, the US watchdog was investigating if some of the tokens listed and available to trade on the exchange were securities. This scrutiny from the regulator is another step by regulatory bodies into the digital asset space, which we have highlighted in various posts recently.
Firm Has Requested Sec Clarifies Digital-Asset Rules
Coinbase has frequently had confrontations with the regulatory agency with respect to how the SEC supervises the cryptocurrency industry. Just last week, Coinbase petitioned the SEC to propose more clarity on which assets are considered securities and for clearer rules. Coinbase has significantly boosted its token offerings of late, having taken a more cautious approach for many years.
In response to the aforementioned SEC probe, Coinbase’s Chief Legal Officer Paul Grewal posted on Twitter, “We are confident that our rigorous diligence process — a process the SEC has already reviewed — keeps securities off our platform, and we look forward to engaging with the SEC on the matter.”
Inside-Trading Accusation Another Cloud For Coinbase
The latest probe comes on the back of last week’s accusation by the SEC that a former employee of Coinbase broke insider-trading rules. The employee is alleged to have passed on information to a friend and his brother to purchase tokens ahead of being listed on the Coinbase platform.
Although Coinbase is not accused of any wrongfulness, the SEC has concluded that of the many digital tokens traded by the accused, nine were securities, of which seven are listed on the Coinbase platform. In response to this prior development, Coinbase posted a blog with the title, “Coinbase does not list securities. End of story.”
