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The SEC sues Coinbase over unregistered operations

Just one day after filing its lawsuit against Binance, the SEC is suing Coinbase.

Donovan Erskine

June 6, 2023 1:20 PM

CNBC

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The hits keep coming for the cryptocurrency industry. Just yesterday we learned that the SEC was suing Binance, the world’s largest crypto exchange, for mishandling customer funds and secretly transferring money to a company owned by its CEO. Now, another major crypto exchange is under fire. Coinbase is also being sued by the SEC, under accusations of operating as an unregistered securities exchange, among other offenses.

The news came from the SEC itself in an official release on the organization’s website. The SEC alleges that Coinbase, a popular cryptocurrency exchange platform, has been “operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency.” Coinbase is also being charged with failing to register the offer and sale of its staking-as-a-service program.

“We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” said SEC Chair Gary Gensler. “In other parts of our securities markets, these functions are separate. Coinbase’s alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC. Further, as we allege, Coinbase never registered its staking-as-a-service program as required by the securities laws, again depriving investors of critical disclosure and other protections.”

This announcement comes just one day after the SEC announced that it would be suing Binance. After the collapse of FTX last year which led to a rough patch for the cryptocurrency business, more companies have found themselves under legal fire. As the crypto business gets more dicey by the day, Shacknews will continue to report on the most interesting stories.

Donovan Erskine

News Editor

Donovan is a journalist from Maryland. His oldest gaming memory is playing Pajama Sam on his mom's desktop during weekends. Pokémon Emerald, Halo 2, and the original Star Wars Battlefront 2 were some of the most influential titles in awakening his love for video games. After interning for Shacknews throughout college, Donovan graduated from Bowie State University in 2020 with a major in broadcast journalism and joined the team full-time. He is a huge film fanatic and will talk with you about movies and games all day. You can follow him on twitter @Donimals_