SUMMARY
- The Securities and Exchange Commission (SEC) launches a lawsuit against Coinbase, accusing it of functioning as an unregistered broker and exchange.
- Following the announcement, Coinbase's shares experience a significant slump, with a 13% dip in Tuesday morning trading.
- The SEC claims at least 13 crypto assets on Coinbase's platform, including Solana's SOL token and Cardano's token, are “crypto asset securities”.
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In a daring move that left the crypto community in upheaval, the Securities and Exchange Commission (SEC) took legal action against the renowned cryptocurrency exchange, Coinbase. The lawsuit, filed in a New York federal court on Tuesday, accuses Coinbase of operating as an unregistered broker and exchange. Furthermore, the SEC is calling for the company to permanently desist from these activities.
Coinbase's shares took a nosedive following the news, plunging 13% in Tuesday's morning trading. This happened on the heels of an already rough period for the firm, which saw its stock dip by 9% the previous day. The SEC had just unveiled charges against another titan in the crypto space, Binance, alongside its founder, Changpeng Zhao.
In a televised interview, SEC chair Gary Gensler likened these platforms to a hybrid entity, mixing numerous functions. He asserted, "We don't see the New York Stock Exchange operating a hedge fund," thus highlighting the unconventional operations of these so-called crypto exchanges.
The SEC's lawsuit is comprehensive, targeting Coinbase's main brokerage, exchange, and staking programs, which the regulator argues violate US securities laws. The regulator claims that Coinbase has consistently circumvented regulatory frameworks and failed to meet the disclosure requirements inherent in the country's securities law.
Finally, it alleges that at least 13 cryptocurrencies available on Coinbase's platform are, in the SEC's perspective, “crypto asset securities”. This list includes Solana's SOL token, Cardano's token, and Protocol Labs' Filecoin token, among others.
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