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Coinbase, the US-based cryptocurrency exchange, is reportedly facing an investigation by the Securities and Exchange Commission (SEC) regarding the listing of several crypto assets on its platform. The investigation, according to three people with apparent knowledge of the matter, is looking into whether the exchange has listed assets that could be classified as unregistered securities.
Coinbase, a leading US-based cryptocurrency exchange, is reportedly facing increased scrutiny from the SEC due to the expansion of the number of tokens listed on its platform. According to three people “familiar with the matter,” the SEC will investigate whether the exchange allowed US clients to trade cryptocurrency assets that could be considered unregistered securities.
The reported investigation was established at an earlier point, before another investigation that resulted in the SEC charging a former Coinbase product manager, his brother and his friend. Those actions allowed them to earn more than $1.1 million, according to the SEC.
In this investigation, the SEC alleged that nine of the cryptocurrency assets listed on Coinbase’s platforms are securities, these being AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX and KROM. However, Coinbase’s head of legal affairs, Paul Grewal, has officially denied these claims, claiming that the exchange does not list securities. Grewal also filed a petition with the SEC to issue clear rules regarding digital securities on July 21.
This is just the latest of the problems that Coinbase is currently facing, after being hit by the recent downturn in the cryptocurrency market. While the stock exchange announced it would slow hiring in May, the company had to make deeper changes to its structure. The stock exchange carried out a series of redundancies in June, letting go of 18% of the workforce.
Coinbase’s stock price on the Nasdaq is also suffering as a result of global macroeconomic conditions and the current so-called “cryptocurrency winter phase” the market is facing. Analysts at Goldman Sachs downgraded $COIN to a sell rating in June when the stock was priced 83.78% below its high of $342.98. At the time, analysts stated that the company needed to make “significant reductions in its cost base.”
What do you think about the investigation the SEC is reportedly conducting against Coinbase regarding the listing of unregistered securities? Tell us in the comments section below.
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