The U.S. Securities and Exchange Commission (SEC) has filed a new lawsuit against Coinbase accusing the crypto company of running an unregistered securities exchange in the United States. This news comes after the decision of the regulatory agency to sue the crypto exchange Binance and the CEO Changpeng Zhao for violating securities laws in the U.S.
SEC Files Lawsuit Against Coinbase
The SEC is charging Coinbase for operating as an unregistered securities exchange, broker and clearing agency in the United States. As per the press release published by the SEC, the company has been offering and selling securities in connection with its staking-as-a-service program.
As per the report, since 2019, Coinbase has made billions of dollars thanks to offering securities services as an exchange. The regulatory agency informs that Coinbase failed to register with the financial watchdog, something that could have affected investors.
SEC Chair Gary Gensler explained that Coinbase’s failures deprive investors of critical protections. Additionally, Gubrir S. Grewal, Director of the SEC’s Division of Enforcement, users can’t ignore the rules because they don’t like them.
About the lawsuit, SEC Chair Gensler said:
“In other parts of our securities markets, these functions are separate. Coinbase’s alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC”
As UseTheBitcoin reported, the SEC sued Binance due to allegedly running illegal trading activities in the United States. Due to this situation, the cryptocurrency market plummeted. Bitcoin (BTC), the world’s largest cryptocurrency, fell by over 5% in just 24 hours.
According to CoinGecko, Bitcoin is now being traded above $26,000 and it has a market capitalization of $500 billion.