cryptocurrency

The Securities and Exchange Commission announces a new investigation into Coinbase

Coinbase is one of the largest and most powerful cryptocurrency exchange platforms in the world, but lately, it has struggled with it.

The Securities and Exchange Commission is looking into Coinbase

Things started a few months ago when the company announced that it would impose a hiring freeze due to the ongoing crypto winter. Initially, 2022 was the year the exchange rose to new heights and nearly tripled its workforce, but the price crash eventually brought those plans to a halt.

From there, things got so bad that the company had to lay off about 18 percent of its employees. Then a former executive was put into a digital currency insider trading scheme. Now, it seems Coinbase is a file thread Securities and Exchange Commission (SEC) investigation. The agency is accusing the platform of selling unregistered securities, an allegation Coinbase vehemently denies.

Billionaire investor and Dallas Mavericks owner Mark Cuban has commented on the situation, claiming that the SEC will be tougher than ever in the coming weeks and months on any company that may have failed to abide by its early rules regarding cryptocurrencies. He described what was to come as a “nightmare” for the cryptocurrency industry and commented:

I think this is bad? Wait until you see what they come up with to register the codes. This is the nightmare that awaits the cryptocurrency industry. Otherwise, how can you keep thousands of lawyers on staff and create reasons to demand more taxpayer money?

The latest move against Coinbase is related to the fact that a former employee was arrested for insider trading. It is believed that seven of the nine cryptocurrencies the employee knew were not registered securities, which means the SEC believes Coinbase may have been out of line. The good news is that the gambit is drawing criticism across the board from individuals such as US Senator Patrick Tomei, who disagreed with the Securities and Exchange Commission ruling and said:

[This] The enforcement action is the perfect example of the SEC having a clear say on how and why certain tokens are classified as securities, yet the SEC has failed to disclose its view before initiating enforcement action.

The company denies any wrongdoing

Coinbase said it did nothing wrong; That each symbol it lists goes through a rigorous verification process to ensure that it does not conflict with any current laws set by the SEC or relevant agencies. Paul Grewal, the company’s chief legal officer, said in a statement:

Seven of the nine SEC fee-listed assets are listed on Coinbase. None of these assets are considered securities. Coinbase has a rigorous process to analyze and review each digital asset before it is made available on the exchange, a process that has been reviewed by the Securities and Exchange Commission itself.

Tags: coinbase, SEC, securities

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