- The U.S. Securities and Exchange Commission (SEC) has called out Coinbase for the trading of an alleged 9 unregistered securities.
- In response, Coinbase affirmed “we don’t trade securities”, 7 out of 9 alleged “securities” are still active on the platform.
- Last week, the first crypto insider trading case made waves, as it was revealed that ex-Coinbase manager Ishan Wahi had shared confidential trading info with relatives.
The events of the last week have certainly brought the heat for Coinbase, as the company had to deal with the first-ever crypto insider case, as ex-employee Ishan Wahi was revealed to have exploited his privileged position to make millions in silence. Now, the U.S. Securities and Exchange Commission (SEC) has launched an investigation into whether Coinbase let their clients illegally trade 9 coins, which, according to the SEC, should have been registered as securities, rather than digital assets.
Coinbase Has a Different Opinion
As the SEC continues its crusade against crypto, it’s no wonder that America’s biggest crypto exchange has become their number one target. Fully aware of the allegations, Coinbase continues to trade 7 of the 9 alleged “securities”. In addition, Coinbase Global has hit back, launching a petition demanding that the SEC provide a legal framework for the trading digital assets, as they “don’t list securities”.
“Laws from the 1930s couldn’t predict crypto”, reads the official Coinbase Global tweet, introducing the petition to the SEC. In the full documentation, Coinbase requests that the SEC “issue securities rules that work for crypto securities and unlock a new market for U.S. consumers, developers, and platforms”. Furthermore, Paul Grewal, the head of Coinbase’s legal team, said that he is “looking forward to engaging with the SEC”.
In response to the probe issued by the SEC, Coinbase fired back with a mantra-like blog post, affirming once again that “Coinbase does not list securities. End of story”. However, it is currently unclear who has the upper hand in the case.
I’m happy to say it again and again: 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. A refresher: https://t.co/SaacvrZEiU
— paulgrewal.eth (@iampaulgrewal) July 26, 2022
The SEC Is Clear on Bitcoin (BTC) & Ethereum (ETH)
In contrast to this, the SEC has made its stance clear on the market leaders, clarifying that it does not see Bitcoin (BTC) as a security. While the same justification was applied to Ethereum (ETH), the agency was quick to get into an altercation with Ripple (XRP), as the #7 ranked Altcoin was hit with a massive $1.3 billion lawsuit by the regulatory body in late 2020.
Why You Should Care
The skirmish between Coinbase Global and the U.S. Securities and Exchange Commission (SEC) presents an opportunity for the crypto world in terms of developing a clear legal framework. On the other hand, if the SEC pushes the case, crypto enthusiasts could be exposed to big fines for trading in the illicit coins.