Topline
The Securities and Exchange Commission filed suit against cryptocurrency giant Coinbase on Tuesday, alleging the popular trading platform has been operating an unregistered broker since at least 2019.
Brian Armstrong, founder of Coinbase, photographed for Forbes by Jamel Toppin in January 2020.
Key Facts
In a statement Tuesday, the SEC said it has charged Coinbase with operating its crypto trading platform as an unregistered broker and for failing to register the offer and sale of its staking-as-a-service program, which allows investors to earn returns through the firm’s work in verifying and securing transactions on the blockchain.
The complaint, filed in U.S. District Court for the Southern District of New York, further alleged Coinbase made “billions of dollars unlawfully,” acting as an unregistered broker by providing a marketplace for securities and effecting transactions for Coinbase customers.
Coinbase shares cratered more than 15% in pre-market trading immediately after the suit was unveiled.
In a statement, SEC Chair Gary Gensler said Coinbase’s alleged failures “deprive investors of critical protections” that help prevent fraud and manipulation.
This is a developing story. Please check back for updates.
Source: https://www.forbes.com/sites/jonathanponciano/2023/06/06/sec-sues-coinbase-alleges-crypto-trading-platform-operated-as-unregistered-exchange-since-2019/