The US Securities and Exchange Commission (SEC) is continuing its full-scale assault on crypto exchanges, with Coinbase at the receiving end this time.
Coinbase was charged by the US regulator for allegedly operating its platform as an unregistered securities exchange, broker, and clearing agency while failing to register as these services, depriving investors of regulation and protection.
Since at least 2019, Coinbase has made “billions of dollars unlawfully,” by facilitating the buying and selling of crypto, the SEC’s complaint filed to the New York Southern District Court said.
“Coinbase’s alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC,” said SEC chair Gary Gensler.
The SEC also said it is also charging Coinbase for failing to register the offer and sale of its staking-as-a-service platform.
Coinbase, again since 2019, has allegedly been engaging in unregistered security offerings through its staking-as-a-service program.
Through this program, Coinbase pools each type of customer’s crypto assets, stakes the pool to perform blockchain transaction validation services, and provides a portion of the rewards generated from this work to its customers whose assets were part of the pool.
The SEC said Coinabse failed to register its offers and sales of this staking program as required by law.
Coinbase is one of the largest crypto exchanges globally, ranked second to Binance on the BitDegree Exchange Tracker.
The latest SEC action follows quickly on the heels of yesterday’s news that Binance was being sued for several supposed breaches of regulation as the US regulator clamps down hard on crypto.
The battle between Coinbase and the SEC has been ongoing, with the former suing the latter last month for causing “paralysing uncertainty in the industry”.