- Coinbase is reportedly under investigation by the SEC.
- The investigation aims to determine whether the company listed any cryptocurrencies that should have been considered securities.
- Kraken is reportedly being investigated by the US Treasury Department for violating sanctions.
Surveillance of cryptocurrency exchanges by US regulators is increasing day by day.
Coinbase Global Inc., ($COIN) is facing a Securities and Exchange Commission (SEC) investigation following recent charges against a former chief product officer of the company for insider trading.
The SEC’s current investigation into Coinbase aims to determine whether or not the exchange allows Americans to trade cryptocurrencies that should have been listed as securities, according to three springs. The SEC investigation actually predates the most recent arrest of the former Coinbase chief product officer, because Noted in a previous filing with the SEC.
Former Coinbase employee Ishan Wahi allegedly worked with his brother and another individual to exploit inside information related to the list of specific tokens to take advantage of market conditions.
At the time of the arrest, the SEC did not accuse Coinbase of engaging in insider trading itself, nor did it hold responsibility for the former employee’s actions against the exchange. However, the regulator determined that nine of the tokens used for insider trading were considered as titles. Coinbase confirmed that the platform lists seven such securities on a blog written by its legal director, Paul Grewal, but denies that the assets are in fact a security.
“The SEC accusations highlight a significant problem: the United States does not have a clear or workable regulatory framework for digital asset securities,” Grewal wrote. “And instead of crafting bespoke rules in an inclusive and transparent way, the SEC relies on these kinds of one-off enforcement actions to try to bring all digital assets into its jurisdiction, even assets that don’t are not securities.”
Following the announcement of the Coinbase stock listing investigation, a report from the New York Times said Kraken is also under investigation by the Treasury Department for allegedly allowing sanctioned users in Iran and other restricted regions to continue buying different cryptocurrencies.