Coinbase is a Nasdaq listed crypto exchange. It has disputed claims by the U.S Securities and Exchange Commission that the nine cryptocurrency assets it lists are securities. The company’s chief legal officer stressed: “Coinbase does not list securities. End of story.”
Coinbase insists that it does not list crypto asset securities
In a Thursday complaint, the U.S. Securities and Exchange Commission (SEC), claimed that Coinbase had listed nine cryptocurrency assets. The securities regulator charged a former Coinbase employee with “violating the antifraud provisions of the securities laws” related to insider trading.
In its complaint, the SEC said that cryptocurrency tokens AMP and RLY, DDX are not registered securities.
However, Coinbase immediately disputed the SEC’s allegation that some coins traded on its platform are crypto securities. The exchange’s chief legal officer, Paul Grewal, stressed in a blog post Thursday: “Coinbase does not list securities on its platform. End of story.”
Grewal detailed:
SEC claims that the nine involved digital assets constitute securities. After reviewing the facts, the DOJ decided not to bring securities fraud charges against anyone involved.
The Coinbase chief legal officer proceeded to reference a statement by Caroline Pham, a commissioner with the Commodity Futures Trading Commission (CFTC), stating that the SEC’s action is “a striking example of ‘regulation by enforcement.’”
He also added:
We agree with Commissioner Pham and, respectfully, 100% disagree with the SEC’s decision to file these securities fraud charges and the substance of the charges themselves.
Grewal claimed that “Coinbase has a rigorous process to analyze and review” each crypto asset before listing and trading on its platform.
“This process includes an analysis of whether the asset could be considered to be a security, and also considers regulatory compliance and information security aspects of the asset,” he described.
The chief legal officer noted that Coinbase cooperated with the SEC’s investigation of the former Coinbase employee’s insider trading case. The chief legal officer noted that 7 of 9 crypto assets mentioned in the SEC’s complaint were listed on Coinbase.
Instead of engaging with us in dialogue about seven assets, the SEC went straight into litigation.
The Coinbase officer asserted: “The SEC’s charges put a spotlight on an important problem: the U.S. doesn’t have a clear or workable regulatory framework for digital asset securities.”
On Thursday, Coinbase also announced that it has filed a petition with the SEC requesting the regulator to “begin rulemaking on digital asset securities.” The exchange detailed: “Our petition calls on the SEC to develop a workable regulatory framework for digital asset securities guided by formal procedures and a public notice-and-comment process, rather than through arbitrary enforcement or guidance developed behind closed doors.”
What do you think about Coinbase disputing the SEC’s allegation that some crypto tokens traded on its platform are securities? Comment below.
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