The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase, the largest cryptocurrency exchange in the United States. The SEC alleges that Coinbase has been operating illegally without registering with the regulator, depriving investors of essential protections, Your Content has learned.
This legal action follows a similar lawsuit filed by the SEC against Binance, the world’s largest cryptocurrency exchange, and its founder Changpeng Zhao.
These cases are part of SEC Chair Gary Gensler’s efforts to establish regulatory authority over the crypto industry and enhance investor safeguards.
In the complaint filed in federal court, the SEC claims that Coinbase has evaded disclosure requirements while making billions of dollars from cryptocurrency transactions since at least 2019.
The lawsuit specifically addresses various aspects of Coinbase’s business, including Coinbase Prime, Coinbase Wallet, and the Coinbase Earn staking service.
The SEC emphasizes that Coinbase was fully aware of its obligations under federal securities laws but chose to disregard them.
The SEC’s actions are aimed at ensuring compliance within the crypto space, preventing fraud and manipulation, and safeguarding the interests of investors.
Coinbase and its parent company, Coinbase Global Inc, have not yet provided a response to the lawsuit. Meanwhile, Coinbase’s stock saw a significant decline of 17.1% in premarket trading following the news.
Regarding the Binance case, the SEC has accused the exchange of various misconduct, such as inflating trading volumes, mishandling customer funds, misleading customers about controls, and failing to comply with regulatory standards.
These lawsuits represent the SEC’s commitment to establishing regulatory oversight and promoting transparency in the cryptocurrency industry, according to U.S. News.