The Securities and Exchange Commission (SEC) is investigating whether Coinbase has allowed Americans to trade unregistered securities assets. Bloomberg News report July 26th.
The SEC has doubled its crypto exchange investigation by increasing the number of tokens listed on the platform.
Coinbase currently lists over 150 cryptocurrencies. After minimizing the number of tokens listed for years. The exchange began listing more tokens in 2021 to compete with its rivals.
Meanwhile, Paul Grewal, Coinbase’s Chief Legal Officer, said: The exchange tweeted, “I’m looking forward to working with the SEC on this issue.”
I would like to say it over and over again. We are confident that the rigorous due diligence process (the process the SEC has already considered) will remove securities from the platform and look forward to working with the SEC on this issue. review: https://t.co/SaacvrZEiU
— Paulgrewal.eth (@iampaulgrewal) July 26, 2022
SEC and securities
SEC Chairman Gary Gensler has stated that many digital assets are eligible as securities under the Howie test and advised cryptocurrency exchanges to “participate and discuss” with the Commission. I am.
The Howey Test defines an asset as a security if it involves funding an investment contract in the hope of regaining some profit from the efforts of others.
However, the application of this framework by the Commission has split the regime, and CFTC Commissioner Caroline Pham recently said that the SEC has “(a) Decentralized Autonomous Organization (DAO) -related utility tokens and / or specific It can be explained as a token. ” As securities.
Read my statement above #SEC v. Wah, enforcement regulation & #CFTC authority #crypto #digitalassets #DAO pic.twitter.com/xbHvyshx8l
— Caroline D. Fam (@CarolineDPham) July 21, 2022
Frosty relationship between SEC and Coinbase
SEC and Coinbase enjoy a cold relationship. Listed cryptocurrency exchanges have criticized some of the regulator’s actions on crypto space.
In a recent match, Coinbase violently rejected listed securities after the SEC sued a former employee of the exchange on July 21 for an insider trading allegation.
According to the proceedings, the nine digital tokens traded by the man were securities. Coinbase has listed seven of these tokens.
Correspondingly, the exchange Blog post He repeatedly did not list securities and advised the SEC to focus on providing a regulatory framework for the crypto industry.
We are confident that Coinbase’s rigorous review process will keep securities away from Coinbase’s platform, even without a specific digital asset securities regulatory framework from the SEC.
Exchange CEO Brian Armstrong also wrote a strongly spoken Twitter thread in 2021 when the SEC threatened to sue the company for advancing lending products.
1 / Some really sketchy behavior that recently came out of the SEC.
Story time …— Brian Armstrong – barmstrong.eth (@brian_armstrong) September 8, 2021
According to Armstrong, the SEC has shown some “rough behavior” towards cryptographic space surveillance.
