Coinbase under scrutiny by SEC

Coinbase has alerted its shareholders that it is under scrutiny by the US Security and Exchange Commission (SEC), for its staking programs, although it is not yet a formal investigation. 

Coinbase under scrutiny by SEC for staking and other services

Coinbase, a publicly traded crypto-exchange platform, in its letter to shareholders wanted to warn them that the US Security and Exchange Commission (SEC) is inspecting its services, especially its staking programs. 

JUST IN: ?? The SEC has launched an investigation into #Coinbase’s staking programs.

— Watcher.Guru (@WatcherGuru) August 10, 2022

“JUST IN: The SEC has launched an investigation into Coinbase’s staking programs”.

At the moment, this is not a full-fledged formal investigation, but it appears that the crypto platform has received several subpoenas and requests for documents and information from the SEC, specifically regarding certain programs. 

Specifically, the company clarified that the requests were associated with its staking programs, asset listing process, asset classification, and stablecoin products.

SEC’s scrutiny of Coinbase

In its letter to shareholders, Coinbase is seeking to be as transparent as possible, listing all of the controls that the SEC is placing on the crypto platform. 

Beyond staking and other services, Coinbase states that the SEC has charged three people with securities fraud related to crypto trading. 

Not only that, recently, Bloomberg itself had reported on the hypothesis that the SEC was investigating the possibility that Coinbase had listed cryptocurrencies that should have been registered as “securities”. The first crypto subject to such attention was XRP, culminating in a lawsuit by the agency against Ripple for the same reason. 

In any case, Coinbase informs shareholders that it intends to engage in discussions with the SEC, writing as follows: 

“As with all regulators around the world, we are committed to productive discussion with the SEC about crypto assets and securities regulation, and to working alongside all policymakers to build a workable regulatory framework for the cryptoeconomy that addresses any areas of risk, while enabling the development and adoption of digital innovation for the benefit of the broader society”.

Ethereum staking and partnership with BlackRock

While the SEC continues its investigation, Coinbase recently announced that it is offering the opportunity for institutional investors to stake Ethereum on its platform. 

This is a 5% return on ETH held in the portfolio. Not only that, staking will also be possible for other digital currencies such as Solana, Polkadot, Cosmos, Tezos, Celo and others.

Another recent news that made Coinbase (COIN) shares recover value was the partnership with BlackRock that will allow institutional clients to invest in crypto with Coinbase’s high-quality service. 

On that note, after losing about two-thirds of its value over the past year, following this news COIN shares had a 26% pump, trading at $92 in those days.