Coinbase (a U.S. cryptocurrency exchange) is currently under investigation by the Securities and Exchange Commission. This probe concerns the listing of multiple crypto assets on the platform. According to sources with knowledge, the investigation focuses on whether Coinbase has listed assets that could be considered unregistered securities.
SEC Investigations Reportedly Apply to Coinbase
Coinbase is an American-based cryptocurrency exchange that has been in high demand. The SEC may be increasing scrutiny of Coinbase due to its increased listing of tokens. According to three people “familiar with the matter,” the SEC will be investigating whether the exchange has allowed American customers to trade cryptocurrency assets that can be considered unregistered securities.
According to the report, this investigation took place before another probe, which led to insider trading charges being brought against Coinbase’s former product manager, brother, and friend. According to the SEC, their actions enabled them to make more than $1.1million profit.
In this probe, the SEC alleged that nine of the cryptocurrency assets listed on Coinbase’s platforms are securities, these being AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM. However, Coinbase’s chief legal officer, Paul Grewal, has officially denied these allegations, claiming that the exchange does not list securities. Grewal filed an SEC petition on July 21 to have clear guidelines regarding digital assets securities.
There are more woes
Coinbase has been facing a number of problems since the downturn in cryptocurrency markets. The exchange said it will slow down hiring, but had to make more structural changes. 18% of employees were laid off by the exchange in June.
The price of Coinbase stock on Nasdaq is also suffering as a result of the global macroeconomic conditions and the current so-called “cryptocurrency winter” phase the market is facing. Goldman Sachs’ analysts downgraded $COIN from a buy rating to $COIN on June 1st, when it was trading at 83.78% less than the $342.98 record. At the time, analysts stated the company had to make “substantial reductions in its cost base.”
How do you feel about Coinbase’s alleged investigation by the SEC into the listing of unregistered securities. Comment below.
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