The SEC on Tuesday sued Coinbase, the largest US crypto exchange, with violating securities laws. The suit comes one day after the regulator sued Binance and its CEO, Changpeng Zhao. Coinbase stock fell as much as 21% on the day. Loading Something is loading.
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The SEC on Tuesday sued Coinbase, the largest US cryptocurrency exchange, alleging it violated securities rules.
The lawsuit comes one day after the SEC sued Binance and CEO, Changpeng Zhao for operating an illegal exchange and violating US regulations related to the offering of unregistered securities.
The SEC’s lawsuit, filed in US District Court Southern District of New York, says that Coinbase has operated an unregistered broker, unregistered exchange, and and an unregistered clearing agency “since at least 2019.”
“Coinbase has for years defied the regulatory structures and evaded the disclosure requirements that Congress and the SEC have constructed for the protection of the national securities markets and investors.”
The suit also takes aim at two other Coinbase services, Coinbase Prime and Coinbase Wallet. The SEC complaint says that these services included trading of crypto assets that are considered securities, “bringing Coinbase’s operations squarely within the purview of the securities laws.”
The SEC’s complaint against Binance also says the crypto exchange violated securities rules, but claims that the company diverted customer funds to a trading firm called Sigma Chain that is controlled by Binance’s CEO. The regulator said Sigma Chain conducted fraudulent trades to inflate Binance’s trading volume.
Coinbase stock fell as much as 21% to $46.45 in regular trading on the news of the SEC.
Read the full SEC lawsuit here.