SEC Continues Stand Against Coinbase’s Crypto-Staking Program

• Coinbase has received investigative subpoenas and requests from the SEC.
• Coinbase committed to a productive discussion with the SEC.

The US Securities and Exchange Commission is investigating Coinbase Global Inc’s staking programs that made the exchange enable customers to receive rewards for holding particular cryptocurrencies. Coinbase disclosed this in its most recent quarterly report.

According to a quarterly regulatory filing, the company has received investigation subpoenas and requests from the SEC for records and information about specific customer programs, operations, and current and intended future goods. Also, the investigation concern Coinbase staking programs, asset listing procedure, asset classification, and stablecoin products.

Coinbase stated in the letter that;

We invest heavily in regulatory compliance by working with regulators around the world to shape policy, and have pioneered industry-leading security practices for safeguarding crypto assets.

Where it All Started

The SEC charged an ex-Coinbase product manager with insider trading in July for allegedly informing his brother and a friend about upcoming asset listings before they were made public. The regulators said that nine of the 25 crypto assets involved in the case were securities, while seven of the nine currencies were listed on Coinbase, even though it at the time made no accusations against Coinbase. Later, Coinbase disputed the allegations that these currencies were securities.

Coinbase’s net revenue of 8.5% in the second quarter was derived from blockchain rewards, mostly from staking. During the quarter, it decreased by 16% sequentially to $68.4 million, which was less than the reduction in trading revenue. 

And analysts had expected Coinbase to earn $832.2 million in sales, but the cryptocurrency exchange barely made $808.3 million. In comparison to the same quarter a year prior, when the corporation reported net profits of $1.61 billion, the second quarter saw a net loss of $1.09 billion.

Recommended for you