The United States Securities and Exchange Commission (SEC) is investigating crypto exchange Coinbase over whether it offered unregistered securities to investors in the country, Bloomberg reported on Monday, citing three people familiar with the matter.
Coinbase Faces SEC Probe
According to the report, the regulator has intensified its scrutiny over Coinbase since the crypto exchange increased the number of tokens it offers for trading on its platform. Coinbase currently has more than 150 tokens listed on its platform.
The probe follows the SEC’s investigation into a crypto insider trading scheme involving a former manager at Coinbase last week. The employee allegedly shared non-public information about coin listing with his friend and brother so as to profit from it.
The SEC said that nine of the tokens traded in the alleged scheme are securities.
“We are confident that our rigorous diligence process — a process the SEC has already reviewed — keeps securities off our platform, and we look forward to engaging with the SEC on the matter,” Paul Grewal, Coinbase’s chief legal officer, said.
Coinbase shares ($COIN) plunged 13% after reports of the exchange facing an SEC probe over cryptocurrency listings. At the time of writing, $COIN was trading at $67.07, down more than 83% from its all-time high.
SEC Scrutinizes Crypto Firms
For a long time now, the SEC has always maintained a complicated and strict approach toward the crypto industry. The Commission has taken enforcement actions against several crypto exchanges in the past, especially those that raised funds through initial coin offerings (ICOs).
Since 2020, blockchain firm Ripple Labs and its executives have been in a legal battle with the SEC for allegedly participating in the sale of unregistered securities through XRP tokens. Ripple disputed the claims, saying that XRP is a digital asset and not a security.
The Commission is also reportedly investigating whether Binance violated any rules regarding the sale of securities when its native token, $BNB, was sold through an ICO in 2017.
Meanwhile, in another report last week, SEC chairman Gary Gensler said the commission is working to register crypto lending firms under securities law if they operate like investment companies.
Source: https://coinfomania.com/sec-launches-probe-into-coinbase/#utm_source=rss&%23038;utm_medium=rss&%23038;utm_campaign=sec-launches-probe-into-coinbase