SEC Is Investigating Coinbase Over Securities Listing Accusations

✍️ 19 December, 2023 - 20:24 👤 Editor: Jakub Motyka

• The SEC is investigating Coinbase again due to certain irregularities within the platform.
• At the moment they suspect that its users are trading securities that have not been duly registered.
• What is this research about? How is the SEC handling it?

The United States Securities and Exchange Commission (SEC) has an open investigation related to Coinbase. Apparently the exchange has listed securities on its platform, days after accusing a former employee of committing insider trading. At the moment, the SEC is investigating the company for allowing users within the exchange to trade unregistered securities. At the same time, they have increased their vigilance due to an increase in the number of tokens available for trading.

Currently on the platform you can trade with more than 150 different assets. If prosecuted, the SEC complaint and surveillance would require the exchange to register with the commission pursuant to Section 6 of the Securities Exchange Act of 1934. On the other hand, Paul Grewal stated that “we trust that our rigorous due diligence process, known by the SEC, maintain  securities outside our platform.”

How Have The SEC Actions Affected Coinbase And Its Investors?

The SEC has clashed with Coinbase before over issues related to the definition of tokens and whether they are securities. Although the platform has defended itself and claims that it has always followed the commission's directives. However, since last year they have been under the SEC's scrutiny constantly. This is because, for its loan product, the commission threatened the company to take legal action against it.

The ongoing investigation has caused one of the exchange investors, Ark Invest, to sell part of its shares after learning of the information. the sale of 1.41 million shares had a value of USD 75 million, becoming a sharp drop in the market for Coinbase. This, together with a 4% loss in value before opening on the market, represents a severe blow in the middle of winter.

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