After suing Binance the day before, The SEC has now sued Coinbase.
The lawsuit was filed by the SEC on June 6. According to the SEC, Coinbase operated as an unregistered trading platform.
The SEC names Coinbase and CGI — Coinbase’s holding company — as defendants in the suit. The lawsuit claims:
“Since at least 2019, through the Coinbase Platform, Coinbase has operated as: an unregistered broker, including by soliciting potential investors, handling customer funds and assets, and charging transaction-based fees; an unregistered exchange, including by providing a market place that, among other things, brings together orders of multiple buyers and sellers of crypto assets and matches and executes those orders; and an unregistered clearing agency, including by holding its customers’ assets in Coinbase-controlled wallets and settling its customers’ transactions by debiting and crediting the relevant accounts.”
It also asserts that the staking as a service products provided by Coinbase violates Securities Act of 1933. “the Staking Program includes five stakeable crypto assets, and the Staking Program as it applies to each of these five assets is an investment contract, and therefore a security.”
Like the Binance lawsuit filed on June. The SEC alleges that Coinbase failed to ensure that crypto assets sold did not qualify as securities under the Howey Test.
Click here to read moreWhat are the SEC’s allegations against Binance?
“But while paying lip service to its desire to comply with applicable laws, Coinbase has for years made available for trading crypto assets that are investment contracts under the Howey test and well-established principles of the federal securities laws,” SEC Claims
- The SEC has labeled 13 cryptoassets as securities in the lawsuit, including SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO.
- SOL and ADA were named by the SEC in the Binance case, along with Binance’s native coins, BNB, BUSD, and SAND.
It is just the latest battle in a ongoing war between Coinbase and SEC. Coinbase sued the SEC after receiving a Wells notification earlier this year.
The regulator stated that Coinbase cannot demand regulatory clarification when the SEC was ordered to respond by the court.
“The SEC’s reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry is hurting America’s economic competitiveness and companies like Coinbase that have a demonstrated commitment to compliance. The solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation. In the meantime, we’ll continue to operate our business as usual,” Paul Grewal, the Chief Legal Officer at Coinbase told Blockworks in an email.
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