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Coinbase Faces US SEC Probe Over Improper Crypto Listings: Report

Coinbase is the first crypto company to get listed on Fortune 500.

Coinbase, one of the most popular crypto exchanges, is reportedly facing a probe from the US Securities and Exchange Commission (SEC). The federal agency is investigating if the platform allowed trading of digital assets which should have been registered as securities, as per a report by Bloomberg News on Tuesday. The first crypto company to get listed on Fortune 500, Coinbase has been hard-hit due to the overall global crypto market collapse. It recently laid off over a thousand employees, including 8 percent of its India workforce. 

The report added that the Federal agency is investigating an alleged insider trading scheme, revealed last week. The SEC’s scrutiny of Coinbase reportedly saw an increase since the exchange expanded its number of tokens being offered. On July 21, the SEC alleged that Coinbase had listed nine unregistered securities as regular crypto tokens — AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM. As per an emailed response to Reuters, a Coinbase spokesperson claimed that the company doesn’t list securities.

ALSO SEE: Coinbase Provides Software To US Immigration And Customs Enforcement Agency To Help Track Crypto Transactions

On July 21, Coinbase filed a petition asking the SEC to create rules on digital asset securities. “Even with billions of dollars invested toward crypto innovation, and the passage of more than 13 years since the introduction of Bitcoin, there is still no meaningful crypto securities market in the United States,” Coinbase said in a blog post.

ALSO SEE: Coinbase Lays Off 1,100 Employees, 8 Percent Of India Team Affected; Axed Employee Shares Emotional Post

“Many factors can positively influence how a given market develops, but when it comes to crypto securities there is a significant, foundational hurdle that has prevented that market from maturing. That hurdle is the fact that the securities rules simply do not work for digitally native instruments. They don’t work for tokenised debt. They don’t work for tokenised equity. They don’t work for crypto. And that’s a major problem,” the platform added. 

ALSO SEE: Coinbase Becomes First Crypto Company To Get Listed On Fortune 500

“While the SEC has refused to develop new rules for digital asset securities, several governments and other organizations around the world are well on their way to new, workable crypto rules. The list is significant, and includes the European Union, United Kingdom, Singapore, Japan, Hong Kong, Australia, and Brazil.”

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.

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