Coinbase Under SEC Investigation Over Misleading Statements, Coin Stock Falls By 6%

Barely hours after suffering a security breach, US-based cryptocurrency exchange Coinbase is now the subject of an SEC investigation. The securities watchdog is probing Coinbase for alleged untrue statements about its user metrics from 2021, sending COIN stock spiralling downward.

US SEC Launches Probe Against Coinbase For Misleading Statements

According to a New York Times report, the US SEC is investigating Coinbase over previous disclosures about its user numbers. Per the report, the SEC is hinging its probe on a 2021 disclosure where Coinbase claimed to have over 100 million verified users.

While Coinbase ceased citing the document in further interactions with the SEC, the securities watchdog is accelerating its investigations. The NYT report claims that the exchange has been interfacing with the SEC over the matter since the start of the year.

Unable to reach a resolution, Coinbase is mounting a strong defense, enlisting law firm Davis Polk & Wardwell to its ranks. Coinbase Chief Legal Officer Paul Grewal took swipes at the investigation, describing it as a fallout from the Gensler years.

“The SEC inquiry is a holdover investigation from the prior administration about a metric we stopped reporting two and a half years ago,” said Grewal.

However, Grewal expressed a firm belief in resolving the lingering issues with the SEC. Back in February, the SEC ended its long-running lawsuit against the exchange as Donald Trump took office. In the following months, parties appeared to bury the hatchet with the exchange uncovering conflict in its FOIA findings against the SEC.

COIN Stock Tumbles By Over 6% Amid Reports Of A Security Breach

Coinbase is undergoing a torrid patch, barely days after joining the S&P 500, sending COIN on a 23% rally. At the moment, COIN Stock has fallen by over 6% to trade at $246.36 in a jarring decline.

While the SEC investigation is triggering the slump, the COIN Stock decline is linked to an earlier security breach. Coinbase suffered a hack. Coinbase suffered a hack that sent stock prices tumbling, with claims of full reimbursement failing to halt the decline.

The slew of negative reports around the exchange stands in stark contrast to a previous streak of victories. Last week, Coinbase acquired Deribit for $2.3 billion while rolling out a 24/7 Bitcoin and Ethereum futures trading offering.

The exchange has racked up a series of regulatory wins in key US states over its staking offerings, but the lingering issues with the SEC threaten its progress.

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Aliyu Pokima

Aliyu Pokima is a seasoned cryptocurrency and emerging technologies journalist with a knack for covering needle-moving stories in the space. Aliyu delivers breaking news stories, regulatory updates, and insightful analysis with depth and precision. When he’s not poring over charts or following leads, Aliyu enjoys playing the bass guitar, lifting weights and running marathons.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.