Coinbase, the US-based cryptocurrency exchange, is reportedly facing an investigation by the Securities and Exchange Commission (SEC) regarding the listing of several crypto assets on its platform. The investigation, according to three people with apparent knowledge of the matter, is looking at whether the exchange has listed any assets that could be classified as unregistered securities.
Coinbase has reportedly come under scrutiny from the SEC
Coinbase, a major US-based cryptocurrency exchange, is would have facing intense scrutiny from the SEC due to the increase in the number of tokens listed on its platform. According to three people “familiar with the matter”, the SEC will investigate whether the exchange allowed US customers to trade cryptocurrency assets that may be considered unregistered securities.
The reported investigation was established at an earlier date, before another probe which led to the SEC filing insider trading charges against a former Coinbase product manager, his brother, and his friend. Those actions earned them more than $1.1 million, according to the SEC.
In this investigation, the SEC alleged that nine of the cryptocurrency assets listed on Coinbase’s platforms are securities, namely AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM. However, Coinbase Chief Legal Officer Paul Grewal has officially refuse these allegations, claiming that the exchange does not list the securities. Grewal too deposit a petition to the SEC to issue clear rules regarding digital asset securities on July 21.
This is just the latest of the issues Coinbase is currently facing, having been hit by the recent downturn in the cryptocurrency market. While the exchange announcement that it would slow down hiring in May, the company had to make more far-reaching changes to its structure. The exchange realized a series of layoffs in June, laying off 18% of its workforce.
Coinbase’s share price on the Nasdaq is also suffering from global macroeconomic conditions and the current so-called “cryptocurrency winter” phase the market is facing. Goldman Sachs analysts downgraded $COIN hit a sell rating in June when the stock price was 83.78% below its all-time high of $342.98. At the time, analysts said the company needed to make “substantial reductions in its cost base.”
What do you think of the SEC investigation against Coinbase regarding the listing of unregistered securities? Tell us in the comments section below.
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