SEC Targets Coinbase in Legal Action Amidst Crypto Regulatory Push: Allegations of Unregistered Operations and State Law Violations

June 07, 2023

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase, the largest cryptocurrency platform in the United States, alleging that it operated illegally by failing to register as an exchange. This comes as the SEC intensifies its efforts to assert jurisdiction over the crypto industry, aiming to regulate it and restore investor trust. Coinbase's general counsel stated that the company will continue operating as usual and remains committed to compliance. Additionally, ten U.S. states, including California, have accused Coinbase of securities law violations related to its staking rewards program. Following the news, Coinbase's parent company's shares experienced a significant decline, and customers withdrew millions of dollars. The lawsuit seeks civil fines, the recovery of ill-gotten gains, and injunctive relief. This legal action follows the SEC's recent case against Binance, the world's largest cryptocurrency exchange.

William Lemanske