The US Securities and Exchange Commission sued cryptocurrency platform Coinbase for trading on the exchange without being registered.
The US Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase, accusing it of violating US securities laws. The cryptocurrency platform is operating as an unregistered stock exchange and broker-dealer.
The legal action comes a day after the securities watchdog filed a complaint against Binance, the world’s largest cryptocurrency platform, for irregularly managing user funds and lying to investors and regulators, among other things.
In an official statement, the SEC said that Coinbase also failed to record the supply and demand of its cryptocurrency staking service and its operations as a clearing house to guarantee exchanges between investors, lenders and other financial agents.
How will the EU lawsuit affect Coinbase cryptocurrency platform?
The allegations against Coinbase do not only concern the operations of its cryptocurrency exchange platform. They also affect Coinbase Prime, its trading and asset custody service for large customers, and the Coinbase Wallet.
According to the SEC, since at least 2019, the company has made billions of dollars by allowing the purchase and sale of cryptocurrencies it considers unregistered securities.
“Since at least 2019, Coinbase has earned billions of dollars by unlawfully facilitating the purchase and sale of cryptoasset securities,” the SEC contends in the notice in which it insists that Coinbase blends traditional securities market services with those of a broker-dealer without having registered either of those functions.
As we have mentioned to you in other Globe Live Media briefing notes, the number of verified Coinbase users globally grew by approximately two million between Q3 and Q4 2022, bringing it to around 110 million verified users.
Coinbase is an online platform that acts on the one hand as a digital wallet and on the other hand allows the buying and selling of cryptocurrencies (cryptocurrency exchange).