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Update:
- The Securities and Exchanges Commission (SEC) thoroughly reviewed Coinbase before a 2021 public offering and declared its registration effective, according to a Coinbase filing in New York federal court.
- Twelve of the 240 tokens traded on Coinbase’s exchange are securities, but the SEC didn’t call them securities during a 2019 review, the company says. It also claims the commission did not say it operated against SEC rules.
- “The SEC’s about-face is not a product of material changes to Coinbase’s business since 2021; none are alleged,” Coinbase writes in its filing challenging SEC claims that it is an unregistered national securities exchange. “Nor is it due to new information.”
- The SEC was not granted any new power to regulate digital asset exchanges yet changed its position on its ability to regulate since 2021, according to Coinbase.
- SEC Chair Gary Gensler told Congress in May 2021 the SEC lacks statutory authority to regulate businesses like Coinbase, the Coinbase filing says.
Coinbase lawsuit overview:
- Who: The Securities and Exchange Commission filed a lawsuit against Coinbase Inc. and Coinbase Global, Inc.
- Why: The SEC claims Coinbase is operating as a broker, exchange and clearing agency without registering with the SEC for any of those functions.
- Where: The lawsuit was filed in federal court in the Southern District of New York.
- What are my options: Try Binance as an alternative to Coinbase.
(June 8, 2023)
The Securities and Exchange Commission filed a lawsuit against Coinbase, Inc., and Coinbase Global, Inc., over accusations that Coinbase is operating as a broker, exchange and clearing agency without registering with the SEC for any of those functions.
The Exchange Act gives the SEC the right to create laws to protect investors in the securities markets and Coinbase is not following those laws, according to the SEC lawsuit. Congress, in fact, has declared that SEC oversight is essential for the national securities markets and economy to function properly, according to the Coinbase lawsuit.
“By collapsing these functions into a single platform and failing to register with the SEC as to any of the three functions, and not having qualified for any applicable exemptions from registration, Coinbase has for years defied the regulatory structures and evaded the disclosure requirements that Congress and the SEC have constructed for the protection of the national securities markets and investors,” the SEC lawsuit states.
States also file Coinbase lawsuit over unregistered securities sales
A multi-state task force of Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin also filed a Coinbase lawsuit over selling securities in each of their states.
South Carolina, for example, stated Coinbase had nearly 3.5 million staking rewards program accounts nationwide with a total asset value of approximately $4.8 billion, of which more than 43,000 accounts were held by South Carolina investors with a total asset value of approximately $37.7 million as of March 29.
The SEC notified Coinbase in early April it was investigating whether Coinbase has violated any U.S. securities laws.
Have you purchased securities or transacted with Coinbase? Let us know in the comments.
The plaintiff is represented by Jorge G. Tenreiro, Ladan F. Stewart, Nicholas C. Margida, Peter A. Mancuso, Ben N. Kuruvilla and Elizabeth Goody of the SEC.
The SEC lawsuit is Securities and Exchange Commission. v. Coinbase Inc., et al., Case No. 1:23-cv-04738, in the U.S. District Court for the Southern District of New York.
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68 thoughts onCoinbase responds to SEC suit saying it worked with regulator prior to IPO
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Yes I currently have stock on coinbase and an additional wallet
I made 2 large transactions through coin base, both for over $200, and they kept my money. The transactions on my coin base account said transfer was successful, but I never got my money. They claimed that I used a bridge that was unsupported for the transaction.