The United States Securities and Exchange Commission (SEC) is apparently looking into crypto exchange Coinbase on the basis that it allowed Americans to trade unregistered securities.
The recent fight between Coinbase and the U.S. SEC
The regulator was looking into some of the coins featured on the exchange, according to a Monday Bloomberg report. Seven cryptocurrencies listed on Coinbase were allegedly securities, according to allegations made by the SEC last week in a separate insider trading lawsuit against Coinbase’s former product manager, as TheCoinRise reported.
Gary Gensler, the chair of the SEC, has previously stated that given some of the cryptocurrencies the exchange lists, he thinks it should be registered as a national securities exchange.
SEC closely looking at the exchange’s listing operations
For its part, Coinbase has criticized the SEC for failing to provide clear guidelines for determining whether cryptocurrencies may be classified as securities. Faryar Shirzad, the exchange’s chief policy officer, claimed that current securities regulations might not apply to digital currencies.
Bloomberg claims to have contacted people close to the matter, which revealed that the SEC is giving a closer look at Coinbase’s practices amid the increase in token listings.
As of Monday morning, there were more than 200 tokens listed on Coinbase’s asset directory page.
Paul Grewal, Chief Legal Officer at Coinbase, recently said in a blog post:
“The SEC’s charges put a spotlight on an important problem: the U.S. does not have a clear or workable regulatory framework for digital asset securities.”
Grewal commented on SEC’s latest investigation by stating that the company is “confident that [its] rigorous diligence process—a process the SEC has already reviewed—keeps securities off the platform, and [the company] looks forward to engaging with the SEC on the matter.”
Exchange Chief Executive Officer Brian Armstrong said on a Twitter post that the goal of listing any token on the exchange legally appears to have its own drawbacks.
1/ Reminder about how Coinbase lists assets: our goal is to list *every* asset where it is legal to do so.
— Brian Armstrong – barmstrong.eth (@brian_armstrong) June 28, 2021