The SEC has suddenly charged up its scrutiny over Coinbase. But why did this unforeseen situation arise? It is due to the expanded number of token offerings for trading. This led to legal filings and clashes in the crypto market. Many analysts have their say regarding the matter. We have heard of the news where trading charges were filed against two former Coinbase product managers and two other people. However, now the US Securities and Exchange Commission (SEC) is investigating if the cryptocurrencies which were listed under the exchange are securities.
In this article we will discuss everything about the current issue. Besides, we will discuss the legal steps taken against it. Stay with us throughout the end, if you are interested.
Let us delve into the matter
According to a citing source who knows the matter, Bloomberg reported that the current probe predates the SEC’s investigation into the alleged insider trading scheme.
Coinbase’s legal head Paul Grewal ensured that the team is looking forward to engaging with the enforcement.
We are confident that our rigorous diligence process – a process the SEC has already reviewed – keeps securities off our platform.Paul Grewal
In recent months, Coinbase had spoken about the rise in its token offerings. Besides, the current figures stand at over 150. However, if the SEC manages to transform those tokens as securities, the exchange would need to register with the regulatory security force.
Legal filing of case
In the legal accusation for insider trading in the crypto industry, previous Coinbase manager Ishan Wahi along with his brother and another partner (name unknown) was arrested on 21st July.
During this time, the SEC had a clash with Coinbase over crypto tokens such as ENS, GALA, POWR, and ALCX. Further, they classified these tokens to be securities. However, the managers of the DOJ and the CFTC did not seem to be in agreement with the SEC’s decision of classification.
Furthermore we see that the CFTC Commissioner Caroline D. Pham expressed her opinion in the matter. According to the commissioner, the move to investigate nine tokens mentioned in the charge as securities could significantly have “far-reaching implications for future legal disputes and consumers alike.”
Coinbase has previously asked the SEC to develop a framework for digital asset securities.
Coinbase is currently facing some issues that we have talked about due to the SEC probe. Let’s see what happens in the future.