Last week, the U.S. DOJ and the SEC nabbed three Coinbase executives on charges of internal trading. However, this led to a new battle between Coinbase and SEC wherein the regulator accused Coinbase of securities fraud by listing unregistered tokens.
As per sources familiar with the matter, the SEC has already started an investigation into if Coinbase’s crypto listings should have been registered as securities. The sources told Bloomberg that the SEC’s scrutiny of Coinbase increased following some major listings over the last year.
The U.S. SEC has already increased scrutiny in the crypto sector following the recent crash in the crypto market. Furthermore, the recent bankruptcies of Celsius and Voyager have forced regulators to step up measures in the crypto space.
Besides, the U.S. SEC is also keeping a major watch on crypto trading platforms. As of now, more than 150 cryptocurrencies are listed on Coinbase. If the SEC proves any of them to be securities, the firm will have to register with the regulator as an exchange. However, Coinbase’s Chief Legal Officer, Paul Grewal, has said that they have a rigorous process to analyze each digital asset before listing them on the exchange. The exchange claims no wrongdoing in the matter.
Bring Clear Crypto Regulatory Rules
Following its recent scuffle with the SEC, Coinbase has asked for clear regulatory rules in the crypto space. Coinbase has itself acknowledged that it has been facing scrutiny from the regulators.
During its first-quarter earnings, Coinbase noted that it “received investigative subpoenas from the SEC for documents and information about certain customer programs, operations, and intended future products, including the company’s stablecoin and yield-generating products”.
The SEC is also looking to expand its jurisdictional grip in the crypto sector. It has also asked the U.S. Congress to give it additional rights to oversee the regulation of the broader crypto sector.
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