The US Securities and Exchange Commission took legal action against Coinbase, a leading cryptocurrency exchange in the United States. The charges leveled against Coinbase include allegations of operating an unlawful exchange and allowing investors to trade unregistered securities.
Following the announcement, COIN shares experienced an 18% decline in early New York trading, while Bitcoin and Ethereum both experienced slight decreases.
SEC going after Coinbase following Binance
The SEC’s legal action against Coinbase comes at a time when the cryptocurrency industry is facing increased scrutiny from regulatory authorities. SEC Chair Gary Gensler has expressed the view that many crypto platforms have not adhered to securities laws and have harmed investors.
Gensler aims to establish that nearly all digital assets should be subject to regulations similar to those governing stocks, bonds, and other investment instruments.
The 101-page lawsuit filed against Coinbase on Tuesday outlined a series of allegations, pointing out specific altcoins operating on Ethereum, Solano, Cardano, and other networks as securities. The SEC claimed that the exchange violated regulations by offering these tokens to investors without proper compliance.
Coinbase CEO Brian Armstrong has consistently expressed his opposition to the SEC’s attempts to impose existing securities laws on cryptocurrency companies, including his own. The latest actions by the SEC on Binance and Armstrong’s exchange are proving once again its continuous efforts to clamp down on the crypto industry.