Just one day after filing 13 charges against Binance, the US Securities and Exchange Commission (SEC) has now placed Coinbase into its crosshairs, suing the second-top crypto exchange in the New York federal court on Tuesday, June 6.
Similar to the Binance lawsuit, the securities regulator alleges that Coinbase violated US securities laws. Notably, the SEC charged Coinbase with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency, in addition to failing to register the offer and sale of its crypto asset staking-as-a-service program.
“Coinbase has never registered with the SEC as a broker, national securities exchange, or clearing agency, thus evading the disclosure regime that Congress has established for our securities markets.”-the SEC wrote in the complaint.
In particular, the crypto exchange has been accused of securing “billions of dollars in revenues by, among other things, collecting transaction fees from investors whom Coinbase has deprived of the disclosures and protections that registration entails and thus exposed to significant risk.”
Director of the SEC’s, Division of Enforcement, Gurbir S. Grewal, noted:
“While Coinbase’s calculated decisions may have allowed it to earn billions, it’s done so at the expense of investors by depriving them of the protections to which they are entitled.”
The SEC’s action against Coinbase came a day after the securities regulator sued Binance and its founder Changpeng Zhao, accusing them on several grounds, including violating securities regulations and commingling billions of dollars worth of investors’ funds, while “placing investors’ assets at significant risk.”
The action triggered significant withdrawals from the Binance exchange, with netflows at -$778 million over the 24-hour period.