Coinbase Tumbles As SEC Files Lawsuit, Tightens Crypto Market Grip
Coinbase #Coinbase
Coinbase Global COIN shares slumped lower Tuesday after the U.S. Securities and Exchange Commission charged the crypto trading platform with operating as an unregistered broker, exchange and clearing agency.
“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.”
“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,” Gary Gensler added.
The SEC filed its lawsuit against Coinbase in a Federal court in Manhattan just twenty-four hours after it published a damning set of allegations against Binance, the world’s biggest crypto exchange, accusing it of being part of a “web of deception” that skirted U.S. laws, commingled client funds and mislead investors and regulators.
The regulator also added 12 digital coins that it deems now as “unregistered securities”, expanding its purview to around $115 billion with of cryptocurrency assets as it tightens it grip on the murky global market.
Coinbase shares were marked 14.4% lower in pre-market trading to indicate an opening bell price of $50.28 each.
Bitcoin prices stabilized in overnight trading, but remain within touching distance of a two-and-a-half month low, following the SEC’s moves against Binance and Coinbase and were last seen trading 0.01% higher on the session at $25,753.20 each, marking its year-to-date gain at around 55%