“The entire plan of action is based on a rebelliousness with the U.S. protection regulations and we’re requesting that they come into consistency,” Gensler stated. Crypto organisations say the SEC standards are hazy, and that the office is overextending by attempting to direct them.
About 12.8% after SEC accuses Coinbase of SEC violations over crypto assets
Coinbase’s general counsel, Paul Grewal, stated in a statement that the business will continue as usual and has “demonstrated commitment to compliance.” Ten states in the United States, led by California, also accused Coinbase of violating securities laws with regard to its staking rewards program. After earlier falling as much as 209.9%, shares of Coinbase’s parent company, Coinbase Global Inc., were down $6.42, or 12.8%, to $52.29.
According to Nansen, a data company, Coinbase customers withdrew more than $57 million within a few hours of the SEC filing. According to the SEC’s complaint that was filed in federal court in Manhattan, Coinbase has been making billions of dollars since at least 2019 by acting as a middleman in crypto transactions and avoiding disclosure requirements that are meant to protect investors. According to the SEC, Coinbase traded at least 13 securities that should have been registered as crypto assets, including tokens like Solana, Cardano, and Polygon.
In response to the SEC lawsuit over Coinbase, states have launched their own crypto rewards program
Since its inception in 2012, Coinbase has served more than 108 million customers. At the end of March, the company’s balance sheet contained $130 billion in customer crypto assets and funds. Last year, 75% of the company’s $3.15 billion in net revenue came from transactions. Coinbase pools crypto assets and uses them to support activity on the blockchain network in the staking rewards program, which has about 3.5 million customers. In return, Coinbase gives customers “rewards” after taking a commission for itself.
The states zeroed in on this program likewise incorporate Alabama, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin. Coinbase was fined $5 million by New Jersey for selling securities that weren’t registered. The SEC lawsuit filed on Tuesday seeks injunctive relief, restitution for illegal gains, and civil fines. In March, the SEC had warned Coinbase that there might be charges. In a statement, SEC Enforcement Chief Gurbir Grewal stated, “You simply cannot ignore the rules because you don’t like them.”
Binance facing another SEC lawsuit over cryptocurrency after it expands outside U.S
As a result of Gensler’s crypto crackdown, the industry has increased compliance, put products on hold, and expanded outside the country. Gensler’s attempts to regulate the sector were rejected by Blockchain Association CEO Kristin Smith. The SEC blamed Binance for blowing up exchanging volumes, redirecting client reserves, inappropriately coexisting resources, neglecting to keep well off U.S. clients off its foundation, and deluding clients about its controls. According to Nansen, a data company, investors withdrew approximately $790 million from Binance and its American subsidiary following the news on Monday.
Binance stated that the lawsuit reflected the SEC’s “misguided and conscious refusal” to provide clarity to the crypto industry and pledged to vigorously defend itself. Coinbase grinding with Gensler dates to 2021, when the SEC took steps to sue if Coinbase somehow happened to allow clients to procure interest by loaning advanced resources. The idea was shelved by the company.
Source: https://www.cryptoknowmics.com/news/sec-files-lawsuit-against-coinbase-following-binance-lawsuit