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.
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.
“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.
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“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.”
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