See More

SEC Sues Coinbase For Acting as Unregistered Broker: Reports

2 mins
Updated by Geraint Price
Join our Trading Community on Telegram

In Brief

  • SEC claims that Coinbase is acting as an unregistered broker.
  • Coinbase faces lawsuit in New York Federal Court.
  • Binance also sued by SEC for being an unregistered trading entity.
  • promo

The US Securities and Exchange Commission (SEC) has sued the crypto exchange Coinbase for acting as an unregistered broker.

The SEC has been aggressively cracking down on the crypto businesses in 2023. Today, Coinbase became the latest target of its agenda against the crypto ecosystem.

Coinbase Operating Without Registration With the SEC

According to SEC’s court filings, Coinbase merged three functions of a broker, exchange, and clearing agency under a single umbrella. SEC alleges that the exchange operated as an unregistered broker since 2019.

The regulators accused Coinbase of violating the securities rules by offering the staking program that allows investors to earn using Coinbase’s “managerial efforts.” Lastly, SEC claimed that Brian Armstrong’s company offered unregistered trading services for certain crypto assets securities.

Through the lawsuit, the SEC declared Cardano (ADA), Chiliz (CHZ), Solana (SOL), Axie Infinity (AXS), Filecoin (FIL), Internet Computer (ICP), Flow (FLOW), NEAR Protocol (NEAR), Polygon (MATIC), Voyager Token (VGX), The Sandbox (SAND), and Dash (DASH) as securities.

List of cryptoassets named in SEC action
Image source: Courtlistener.com

Impact on Price

After the release of the court filings, almost all of these mentioned tokens have fallen by 1-3% in the following hour. Moreover, according to data from Coinglass, $9.85 million worth of trades have been liquidated in the past 1 hour.

Liquidation heatmap from Coinglass
Image source: Coinglass

The community heavily criticized the due diligence process of the regulators. Crypto influencer Miles Deutscher wrote on Twitter:

“So, let me get this straight. The SEC says that ‘Coinbase has operated as an unregistered broker since 2019.’ Yet Coinbase IPOd in April 2021. So you’re telling me that the SEC let an ‘unregistered broker’ IPO – after carrying out due diligence? Well done Gary.”

Yesterday, the SEC launched a lawsuit against another crypto exchange Binance. It alleged that Binance operated an unregistered trading entity and misdirected investors’ funds.

Got something to say about this article or anything else? Write to us or join the discussion on our Telegram channel. You can also catch us on TikTok, Facebook, or Twitter.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.

Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024

Trusted

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Frame-2264-1.png
Harsh Notariya
Harsh Notariya is a journalist at BeInCrypto, who writes about various topics, including decentralized physical infrastructure networks (DePIN), tokenization, crypto airdrops, decentralized finance (DeFi), meme coins, and altcoins. Before joining BeInCrypto, he was a community consultant at Totality Corp, specializing in the metaverse and non-fungible tokens (NFTs). Additionally, Harsh was a blockchain content writer and researcher at Financial Funda, where he created educational reports on...
READ FULL BIO
Sponsored
Sponsored