The US Securities and Exchange Commission (SEC) is reportedly set to ramp up its investigations into Coinbase, the US’ largest crypto trading platform, amid concerns it allowed US citizens to trade assets that should have been registered as securities.
As reported by Bloomberg, and citing anonymous sources close to the matter, the SEC’s mounting interest in Coinbase is due to the platform expanding the number of assets it carries.
If these 150 assets were officially classed as securities, Coinbase could be required to register with the SEC as an exchange.
Coinbase says it’s not currently registered with the SEC or the US Commodity Futures Trading Commission. However, back in May, the company did file a shelf registration statement with the agency. This means the company will be able to sell securities in the future if it chooses to.
The probe has not yet been made public, but according to Bloomberg’s sources, it predates the SEC’s ongoing case against a former Coinbase manager who it says, along with two other people, carried out insider trading. The SEC says it determined that nine of the tokens traded by the former employee were in fact securities.
However, Coinbase hit back at these claims in a blog post titled Coinbase does not list securities. End of story.
In the post, chief legal officer Paul Grewal says: “ Coinbase has a rigorous process to analyze and review each digital asset before making it available on our exchange — a process that the SEC itself has reviewed,” (our emphasis).
Grewal then went on to call into question the lack of an overarching regulatory framework in the US, and claims that the SEC is simply lumping together all digital assets, even those that aren’t securities.