Here’s a Breakdown of the SEC’s Charges Against Coinbase

Just one day after the Securities and Exchange Commission filed a complaint against Binance, the largest crypto exchange in the world, it has filed charges against the second largest exchange, Coinbase.

Here is a breakdown of what the SEC alleges against Coinbase:

• The SEC claim that Coinbase operated its exchange without proper registrations as a national securities exchange, broker, and clearing agency.
• The SEC also alleges that Coinbase failed to register its crypto “staking-as-a-service” program.
• Coinbase is accused of facilitating the buying and selling of crypto securities without complying with the required regulations.
• The SEC claims that Coinbase combined the functions of an exchange, broker, and clearing agency without obtaining the necessary registrations, depriving investors of important protections.
• By operating without registration, the SEC claimed that Coinbase avoided their oversight, including inspections, recordkeeping requirements, and safeguards against conflicts of interest.
• The SEC’s complaint also holds Coinbase’s holding company, Coinbase Global Inc. (CGI), responsible for certain violations committed by Coinbase.
• Additionally, Coinbase is accused of conducting an unregistered securities offering through its staking-as-a-service program, which involved pooling customers’ stakeable crypto assets and distributing rewards.
• Coinbase’s alleged failure to register has deprived investors of crucial protections, including fraud prevention, proper disclosure, and routine inspections by the SEC.
• The SEC seeks injunctive relief, disgorgement of ill-gotten gains with interest, penalties, and other equitable relief through its complaint filed in the U.S. District Court for the Southern District of New York.
• Coinbase has been critical of the SEC’s approach to regulation and enforcement in the US. They recently filed a legal action against the SEC to provide more clarity for the cryptocurrency industry.

Coinbase Fights for Clear Crypto Regulations, Files Legal Action Against SEC