Nasdaq-listed crypto exchange Coinbase has challenged the U.S. Securities and Exchange Commission’s (SEC) claim that nine of the crypto assets traded on its platform are securities. The company’s chief legal officer pointed out, “Coinbase does not list securities. End of the story.”
Coinbase Insists It Doesn’t List Crypto Asset Titles
The U.S. Securities and Exchange Commission (SEC) alleged that cryptocurrency exchange Coinbase listed nine crypto asset securities in a complaint filed Thursday. The securities regulator accused a former Coinbase employee for “violating the anti-fraud provisions of securities laws” related to insider trading.
The SEC said in its complaint that crypto tokens AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM are unregistered securities.
However, Coinbase immediately disputed the SEC’s allegation that some coins traded on its platform are crypto securities. The exchange’s chief legal officer, Paul Grewal, pointed out in a blog post on Thursday: “Coinbase does not list securities on its platform. End of the story.”
Grewal detailed:
The SEC alleges that nine digital assets involved are securities. The DOJ reviewed the same facts and elected not to file securities fraud charges against those involved.
Coinbase’s chief legal officer then referred to a statement by Commodity Futures Trading Commission (CFTC) commissioner Caroline Pham, saying the SEC action is “a stark example of ‘regulation by enforcement’.”
He added:
We agree with Commissioner Pham and, respectfully, 100% disagree with the SEC’s decision to file these securities fraud charges and the substance of the charges themselves.
Grewal claimed that “Coinbase has a rigorous process to analyze and review” each crypto asset before listing and trading it on its platform.
“This process includes an analysis to determine whether the asset can be considered a security, and also takes into account the regulatory compliance and information security aspects of the asset,” he described.
The Chief Legal Officer noted that Coinbase cooperated with the SEC’s investigation into the former Coinbase employee’s insider trading case. Noting that seven of the nine crypto assets mentioned by the SEC in the complaint are listed on the Coinbase platform, he said:
Instead of having a dialogue with us about the seven assets on our platform, the SEC went straight to litigation.
The Coinbase officer asserted, “The SEC accusations highlight a significant problem: the United States does not have a clear or workable regulatory framework for digital asset securities.”
On Thursday, Coinbase also announced that it had filed a petition with the SEC asking the regulator to “begin developing rules on digital asset securities.” The exchange detailed: “Our petition calls on the SEC to develop a workable regulatory framework for digital asset securities guided by formal procedures and a public notice and comment process, rather than arbitrary enforcement or guidelines. developed behind closed doors.”
What are your thoughts on Coinbase challenging the SEC’s allegation that certain crypto tokens traded on its platform are securities? Let us know in the comments section below.
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